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PACKER ACQUIRES LAS VEGAS SITE
Crown Resorts has purchased a parcel of land once occupied by the famous Frontier Casino on the Las Vegas Strip
Nevada - New operations
Australian mogul James Packer’s Crown Resorts has paid A$280m (US$260m) for a prime site on Las Vegas Boulevard in a bid to crack the American casino market once and for all. The bil- lionaire, who runs Crown Resorts, has teamed up with former Wynn Las Vegas President, Andrew Pascal, in a joint venture, backed by Oaktree Capital Management.
US – REVEL CLOSES ITS DOORS THIS MONTH The opening of the $2.6bn Revel Casino Hotel was heralded as the start of the transformation of Atlantic City, but instead, as the resort closes its doors and lays off all employees no later than September 10, it has instead dealt a massive blow to the New Jersey seaside resort.
Five years after the longest recession since the 1930s, hotel rooms sit vacant and revenue keeps falling in what was once the second-largest US casino market. New Jersey Governor Chris Christie’s turnaround plan for the municipality, begun in 2011 and hinged on Revel’s success, hasn’t delivered Despite the scheduling of a bankruptcy auction in August, the plug was pulled on the bidding after Revel failed to attract any qualified offers. “Despite the effort to improve the finan- cial performance of Revel, it has not proven to be enough to put the property on a stable financial footing,” said Revel Entertainment Group, the casino’s parent company.
Revel employed 3,187 workers as of June, according to state figures. It was the fourth-highest casino employer in Atlantic City among the 12 casinos at the time. In a letter sent to employees when it filed for Chapter 11 protection in June, Revel warned that without a buyer it would be forced to shut its doors and all employees would be let go. It joins The Atlantic Club, which closed in January; and the planned shut- ting of Caesars’ Showboat on Aug. 31 and Trump Plaza Hotel & Casino Sept. 16. The moves affect 7,800 employees. The closings would leave the city with eight casinos, down from as many as 12, and may increase the jobless rate from June’s 13.1 per cent level, about double the state average. Gambling venues account for almost half the city’s jobs: 5,883 positions in a workforce of 13,500.
US – HUNSBERGER LEADS US SALES AT WMS GAMING Scientific Games has appointed Deron Hunsberger as the new Senior Vice President, North America Sales, for WMS Gaming. In his role, Mr. Hunsberger will lead sales, participa- tion and leasing, sales support, and marketing for WMS Gaming throughout the US and Canada.
Mr. Hunsberger is a talented leader in the gaming industry with more than 20 years of sales and marketing experience. He served as Senior Vice President of Sales, Americas at SHFL entertainment, Inc., now Bally Technologies, Inc., from 2011 to July 2014 after joining the company as Vice President of Sales and Marketing, North America in 2010. Previously, Mr. Hunsberger served as Senior National Manager of Gaming Operations at Aristocrat Technologies, Inc. from 2008 to 2010. Before joining Aristocrat Technologies, he served as Director of North American Sales at Konami Gaming, Inc., and held progressively responsible positions as an account executive in the gaming industry.
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The new resort company, which is majority- owned by Crown, has bought a controlling interest in a 34.6-acre vacant site on the world-famous gambling strip formerly occupied by the New Frontier casino.
“You can’t be in the gaming industry and not have a special reverence for Las Vegas – that’s where it all began,” said Mr. Packer, who is co-chairman of the new venture.
“As we have built Crown Resorts into a thriving international company with successful casino ventures in Australia, Macau, and London, we’ve
always kept our eye on Las Vegas. And while we fell short in past attempts to enter that market, we now have the ideal opportunity with a great local partner in Andrew, a leading financial investor in Oaktree, and the perfect piece of property.”
The new resort company hopes to start develop- ment in late 2015 and complete the project in 2018.
“For over 25 years, I’ve studied the ever shifting Las Vegas landscape,” said Mr. Pascal, the other co- chairman. “I’ve always been inspired by this city’s capacity for reinvention. I’m excited to have my hand in crafting something new and fresh for the resurgent Las Vegas market.”
Packer, the son of late media baron Kerry Packer, is one of Australia’s wealthiest people, with a per- sonal fortune estimated at A$7.2 billion.
As well as casinos in Melbourne, Perth, Macau and London, he is also planning one in Sydney and has his eye on the Japanese market.
California Gaming Laboratories International has successfully completed a World Lottery Association Security Controls (WLA-SCS) and ISO 27001 Information Security Management Certification audit for the California Lottery. The audit and certification were conducted by GLI’s Professional Services Division. With the successful audit and certification, the California Lottery becomes the only lottery in the United States to hold the WLA-Security Control Standard (WLA-SCS) and ISO 27001 Certifications.
Rumours circulate at troubled Isle of Capri over possible sale
US US operators without the inter- national benefits afforded by Asian market operations, Boyd Gaming, Caesars, Penn and Isle of Capri, are continuing to feel the pinch from national market pres- sures. While Las Vegas Sands’ last quarter revenues were 85 per cent non-domestic, national operators relying solely on State revenues from the slowly recov- ering Las Vegas and tanking Atlantic City markets are the source of constant rumour right now.
Speculation has been rife in the US for several months that Isle of Capri is for sale. However, last week the St. Louis-based compa- ny announced a management shake-up at the corporate level, eliminating the executive chair- man role with the board of direc- tors and the chief strategic officer
position. Isle of Capri also elimi- nated several other senior posi- tions in the corporate office.
The moves are designed to cut corporate expenses by roughly $2.5m a year, the company said in a statement, which has split analysts views, with either Isle of Capri looking to forge a new path with its restructured team, or it’s tidying up its books in further preparation for a prospective buyer.
Isle of Capri currently operates 15 casinos and racetracks in seven states worth approximately US$1.2bn, and has been in talks to be acquired by Gaming and Leisure Properties Inc., a real estate investment trust con- trolled by rival Penn National Gaming.
However, the management
shake-up may have put the merger speculation to rest as it makes an imminent sale much less likely. Analysts have also speculated that the recent bids for Isle of Capri may have been
lower than anticipated by the Goldstein family, which owns 40 per cent of the company’s out- standing shares.
In the company’s most recent conference call, Isle of Capri said it was looking to save $12m annually in expenses. “Through our ongoing profit improvement program, we continue to stream- line our operations and look for more efficient ways to operate our business,” Isle of Capri CEO Virginia McDowell said in a statement.
Whatever the speculation as to the ownership of Isle of Capri, the near future is likely to be very tough for the US’ traditional domestic casino operators. Without Asian profit-centres or new domestic state licences, the returns are continuing to dimin- ish for these household names.
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