Rising debts and decreased revenues among potential Asian investors is threatening investment in the Alon Las Vegas project headed by Crown Resorts of Australia.
Crown Resorts, owned by Australian billionaire James Packer, along with Oaktree Capital and former Wynn Resorts executive Andrew Pascal bought the Alon Las Vegas site for $260 million with the intent of finishing the about $1.5 billion project.
Unfortunately for Crown, it saw a decrease in gaming revenues for 2015, as Asian gambling in general took a downturn after the Chinese government began discouraging its citizens from traveling to international locations to gamble.
The gaming downturn and reduced revenues caused Crown’s debts to rise to about $2.5 billion, and now it wants to reduce its financial exposure in the Alon Las Vegas project. That means finding more investors, but that might not be easy.
Australian gaming industry analyst Larry Gandler says Crown Resorts owns about 74 percent of the Alon project, but it wants to reduce its ownership in the 35-acre project to about 45 percent.
Gandler estimates the Alon project has a nearly $2 billion budget, and Crown wants to sell off about $425 million in equity to additional investors, but the downturn in Asian gaming revenues likely will make that difficult.
The Alon project is located on vacant site of the former New Frontier casino, which was imploded in 2008. Buyers at the time intended to build a $5 billion hotel and casino resort, but canceled the project after losing financing during the Great Recession.
