Australia's James Packer shows grit with global plan

The last time we heard from James Packer, the Australian billionaire and chairperson of Crown Limited, one of Australia's largest entertainment and integrated resort groups, he was in the mix to acquire Las Vegas' Cosmopolitan. The hotel ultimately went to Blackstone Group, but it showed Packer's determination to break into the U.S. market.

Losing out on The Cosmopolitan didn't discourage Packer, the son of the late media mogul Kerry Packer. But the younger Packer has moved away from the family's traditional media businesses, and focused on creating a gambling and resort empire in Crown. If you haven't heard a lot about James Packer, that could change soon, even though he admittedly called his initial foray into Las Vegas "a disaster."

Crown is reportedly already committed to building a $1.3-billion luxury hotel and casino at the Barangaroo waterfront development in Sydney. The company also plans to spend $400 million in the Sri Lankan capital Colombo on a new hotel and casino, while its Hong Kong-based Melco Crown joint venture is developing new casinos in Macau and the Philippines.

AFR has a feature on Packer, linking to him to such Hollywood heavyweights as Leonardo DiCaprio and Robert De Niro. As AFR points out, Packer is preparing to open another casino in Macau in October, exploring new investment opportunities in Israel, building on his online investments in China and, yes, gearing up to take another stab in Las Vegas.

His next big project is a new luxury resort called Alon Las Vegas (rendering below), which is scheduled to open in 2018. Last AugustCrown paid $280 million for a site formerly occupied by the New Frontier casino. The development will be Crown’s third try in Las Vegas after Fontainebleau Resorts and Cannery Casino Resorts failed to prosper. 

Crown is on a "much stronger footing for another crack at Nevada" that it was previously, Morningstar analysts wrote at the time. The development fills "a critical hole in its portfolio offering for VIP patrons, especially in Asia," the analysts further wrote. 

According to AFR, Packer is looking to almost reconceive Las Vegas, similar to how Steve Wynn rewrote the rules in the late eighties. The unions are tough in Vegas, AFR writes, making it "harder to build mass offerings and the attraction of resorts with a smaller number but more expensive high-end rooms is growing."

A candid Packer told a group of Australian journalists about his past, current and future investments. "In 2007, I spent a lot of money, but despite my foray into Vegas being a disaster, my investment in Macau has paid off," he said. 

Packer and Crown's earlier push into the U.S. resulted in the company having to write down more than $2 billion. 

"I've spent an enormous amount of CapEx over recent years, but I am trying to build a global network of iconic resorts to show the world the quality of our luxury brand," Packer went on to say. "The plan is to create an iconic global business."

To help realize the dream, Packer is cozying up to Hollywood stars. DiCaprio and De Niro appeared in a short film reportedly screened at the City of Dreams casino in the Philippines. As AFR writes, Packer spends a lot of time in Hollywood these days, looking to create new relationships.  

In his home of Australia, Crown's plans for its new $2-billion hotel casino in Sydney are an example of the model Packer has in mind. The proposed venue will have 350 hotel rooms, which equates to around $4.5 million per room. This is more than other high-end casinos such as The Bellagio in Las Vegas which cost around $600,000 to $700,000 a room.

Packer's strategy is to "outstrip the competition with a more expensive but ultra-luxurious product, which will attract high rollers and other guests from the Middle East, Asia and elsewhere."