There’s been another hiccup in the Alon saga, as billionaire James Packer is restructuring his Crown Resorts portfolio “to shield his Australian assets from a prolonged downturn in the Chinese gambling hub” of Macao, according to Bloomberg. Packer’s share of Nobu, the Alon site and British casino operator Aspers Group will all be spun off into a new entity, as will be $2 billion worth of shares in Melco Crown Entertainment. The move is, simply put, an effort to protect the value of Crown’s Australian casinos from the effects of Macao’s recession, where profits are a sixth of what they were three years ago and which has seen Crown’s share price wither 30% over two years.
Lest you think this means curtains for Alon, Las Vegas developments are assured of a “reasonable-sized war chest.” As for what will remain under the Crown banner, market strategist Evan Lucas told Bloomberg, “The Australian assets are humming along nicely enough, but you would not describe them as a great growth story.” Crown will retain Aspinalls casino in London, Internet casino CrownBet, a megaresort project in Sydney, and casinos in Melbourne and Perth. The company plans to channel all profits directly to its shareholders, which makes one wonder where development capital will be derived — although that could be a moot point if Packer goes forward with his plan to take Crown private. Talks are said to be ongoing.
* Penn National Gaming‘s racino in Massachusetts hasn’t been open long enough for year-over-year comparisons but revenue at Plainridge Park is growing sequentially. Unlike all other gaming markets we’ve surveyed (and a few we haven’t), Massachusetts’ lone racino was up 1% last month. Coin-in was flat but Plainridge grossed $13.5 million, which works out to an impressive $348/slot/day, validating Penn’s claim that it is the highest-grossing facility (per machine) in its stable. Penn has been chafing at reports in the Boston papers which implied the casino was doing poorly, which may explain why it is starting to give Wall Street monthly numbers, going public in a different sense of the phrase.
Glenn Straub‘s hastily conceived reopening of Revel is now a day-to-day proposition. He had planned to open 900 hotel rooms today but it won’t happen until tomorrow at the earliest, more likely Friday. No casino operator has been named, although Straub says one has been selected — and is enjoying keeping people guessing who it is. The megaresort is still crawling with construction workers and equipment — hardly the atmosphere for a reboot of Atlantic City‘s most troubled gaming property. It doesn’t have a liquor license and its new name — part of a vaguely Asian retheming — is being kept a secret, which Straub thinks raises interest but merely sows confusion. “I’m not sure I’d want to check in until we get a chance to clean it up tomorrow,” Straub conceded. Even at Straub’s penny-ante purchase price of $82 million, return on investment looks like anything but a slam-dunk and Revel may ultimately be a real-estate play. Straub himself has sent conflicting signals as to whether he’s in it for the long haul or not.
Among the hurdles still to be cleared are 195 hours of elevator inspection (Revel has 39 elevators). At least Straub can take comfort in having inherited a property in near-pristine condition. “The rooms look like someone slept there last night,” said City Councilman Kaleeem Shabazz. Still, as Straub concedes, “I’m not sure I’d want to be here on vacation if you can’t get a drink.”
