Penn. licensing problem jeopardizes Cannery deal

Mar 3, 2009 5:08 PM
The Insider by Ray Poirier |

Is Gretel trying to run away from the gingerbread house, eh casino deal, by tricking the Pennsylvania gaming regulators?

And, does Pennsylvania have stronger gaming licensing laws than Nevada?

These are the questions that have popped up since Gretel Packer, James Packer’s sister and co-beneficiary of their father, Kerry Packer’s will, has attempted to withdraw from the proposed purchase of Las Vegas casinos and a Pennsylvania racino from gaming partners, Bill Paulos and Bill Wortman.

James Packer, through Crown Entertainment, agreed to pay the Las Vegas partners $1.75 billion for the two Cannery properties and The Meadows Racetrack and Casino in Pennsylvania, 14 months ago.

Gretel Packer, however, reportedly never signed on to the deal.

Nevada regulators reviewed the potential sale in December and decided that James Packer had control of the family trust and that his sister did not need to be licensed.

Pennsylvania members of the Gaming Control Board disagreed. They insisted on full financial disclosure from Gretel Packer. That’s when Gretel filed to withdraw from the transaction.

Paulos and Wortman’s Millenium Gaming Inc. charged that Gretel was just using this as an excuse to quash the deal since, according to analysts, the value of casinos has fallen some 86% since the original agreement.

Thus, by getting the Pennsylvania authorities to kill the deal, Gretel was saving a good chunck of money for the family.

And Millenium backs up its charge by pointing out that Gretel revealed her finances to the Pennsylvania investigators on June 11, 2008, when she was interviewed by officials in Melbourne, Australia. Also, they say, she gave financial details in her license application submitted on April 9 as well as details of family finances in an application on May 27.

Meanwhile, Crown executives insist they want to go forward with the purchase and are not a party to a lawsuit filed in Delaware by Consolidated Custodians International Ltd., the Bahamas-based trustee for the Packer family trusts.

The future of the Las Vegas casinos and The Meadows racino now rests with the Pennsylvania gaming regulators.