Packer Ups the Ante

Australian casino giant James Packer will empty his pockets—almost—and plow $10 billion into new casino investments Down Under. Among other developments: a $1.5 billion hotel and apartment tower (l.) at Packer’s Crown Casino in Melbourne.

New challenge to Echo

In a bid to lure more Asian high rollers to his Australian home base, James Packer of Crown Resorts will develop a 90-story hotel and apartment tower at his Crown Casino in Southbank and expand its resort in Perth. Also on the drawing board: a luxury six-star hotel and VIP-only casino at Barangaroo South in Sydney.

According to News Talk 3SW, the $1.5 billion hotel tower in Melbourne will include 400 six-star hotel units and nearly 700 luxury apartments. The property is scheduled to open by late 2019. “We’ve created a really great addition to the Melbourne skyline,” said Todd Nisbet, executive VP of strategy and development for Crown Resorts. “You look at what Sydney’s doing, what’s happening up in Queensland—we need to keep pace.”

Nisbet was alluding to new developments from Crown’s chief rival, Echo Entertainment. Echo is building a $2 billion casino resort in Queensland, and also plans a multibillion-dollar upgrade of its Star Sydney Casino.

Nisbet also noted that Crown Towers was built 20 years ago, “a different time, with different philosophies on hotel room design, as well as where technology is evolving to as well.”

“The development will assist Melbourne in attracting more high-net worth tourists, reinforcing the city’s appeal as a destination for important international conferences, sport and cultural events,” said Crown Resorts Chief Executive Rowen Craigie.

The Asia Gaming Brief reports that Crown Resorts’ main-floor gaming revenue was up 10 percent from July through mid-October, but nongaming revenue grew just 1 percent. The Australian Business Insider reported that Packer “isn’t happy” with the returns.

“We have to get better at achieving an acceptable return on the capital expenditure we spend in Australia,” he said at the company’s annual general meeting in Melbourne. “The capex we’ve spent in Australia hasn’t delivered the returns we budgeted on.”