Packer plays musical chairs; Atlantic City … the rest of the story

A 41% dive in Crown Resorts prompted James Packer to resign his chairmanship of the company, handing his portfolio to Deutsche Bank veteran Robert Rankin. The change appears to be more cosmetic than substantive, seeing as the brawling billionaire will take on the role of executive director. He said, “Crown remains my number one business priority and passion. I will continue to drive key projects, including our joint business in Asia and our planned resort in Las Vegas.” In other words, it’s business as usual at Crown. (Its profit slump was nothing compared to that of Sociedade de Jogos de Macau, down 54%.) Crown board member Harold Mitchell spun it as a personal matter: “James is going to spend more time with his children, his children live in Los Angeles, so that’s perfectly understandable.”

Also, Packer will retain his co-chairmanship of Melco Crown Entertainment, so anyone expecting him to go anywhere will be greatly disappointed. As for Crown Resorts, Australian play provided a cushion against emaciated Macao revenues, up 7% in Melbourne and 3% in Perth. Still, to add insult to injury, archival Echo Entertainment Group reported 59% higher profits, effectively giving Packer a kick in the rump as he switched chairs. It also comes on the heels of Melco Crown co-chair Lawrence Ho‘s gloomy prognostication that Macao “will never be what it once was.” The termination of a Sri Lanka casino project and a writeoff of Crown’s investment in Cannery Casino Resorts also contributed to the weak quarterly earnings, sapping $45 million from the bottom line. As William Shakespeare wrote, joys come as solitary spies but grief arrives by the battalion.

* The rest of the Atlantic City numbers are in and Caesars Entertainment‘s new grind-joint strategy for Bally’s ($23 million) appears appears to be working, as revenue was flat from last year, arresting a pattern of decline. Predictably, Trump Taj Mahal continued its downward spiral, -12% (on a $19 million gross … remember when it was regularly one of the top three performers in the market?). Every other casino in the market registered gains. Caesars Atlantic City ($29 million) was up 3% and Harrah’s Resort rose 1.5% (on $36 million). Resorts Atlantic City ($17 million) shot up 17% and Golden Nugget ($20 million) gained 10%. Finally, there was a 5% increase at Tropicana Atlantic City, which banked $29 million.