There’s a new power player in gaming and it’s … Brookfield Asset Management? The Canadian lender is already calling the shots (along with Warner Gaming) at the Hard Rock Hotel & Casino, a $1.5 billion quagmire into which Morgans Hotel Group led Credit Suisse. Today, Brookfield officially ousted Sol Kerzner from Atlantis Paradise Island and one other Bahamas resort, gaining over $1 billion worth of assets for a cool $175 million. Among those getting cleaned out in the transaction are Kerzner backers Goldman Sachs and — you guessed it — Colony Capital. The twosome are already partners in misery, Colony CEO Tom Barrack having sold Goldman a big chunk of the then-Las Vegas Hilton, which Goldman now has to turn around after Colony lost the Hilton flag and generally ran the place into the ground. Goldman also way overpaid for Carl Icahn‘s Las Vegas and Laughlin casinos, so it’s no stranger to buyer’s remorse.
Another piece of the fallen Kerzner empire, Atlantis the Palm, is forfeited to a subsidiary of CityCenter co-owner Dubai World, a company whose financial problems ($26 billion in debt, most of it now held by Abu Dhabi) make Caesars Entertainment seem only mildly afflicted. Kerzner’s problems stemmed from an LBO in 2006 — sound familiar? — a time when gaming stocks in particular were reaching dizzying heights. One of Kerzner’s fellow debt junkies, Gary Loveman, is beginning to look as though he were well rid of the Baha Mar project that Caesars fled several years back. The Chinese-bankrolled resort has run up a $3.4 billion price tag and among its anchor tenants is — oh no! — Morgans Hotel Group. Loveman’s best deals may ultimately turn out to be the ones he didn’t make.
Social gambling is becoming all the rage on Facebook, having grown 33% from 2010 to 2011, and over 50% more in the first few months of 2012. (It sure beats the heck out of running a farm.) Ergo, Facebook is the battleground of a proxy war between casino companies whose applications are fighting it out for free-play market share. Wynn Resorts is mulling an alliance with Poker by Zynga (and if Internet poker is legalized in Nevada and elsewhere, Zynga could also team with Wynn-affiliated Pinnacle Entertainment, whose geographic presence is complimentary to Wynn’s). Wall Street may have looked askance at International Game Technology‘s half-billion-purchase of popular social-gaming firm Double Down, but it’s seeming more and more like an astute wager on CEO Patti Hart‘s part.
“you guessed it — Colony Capital” Hysterical!