James Packer is reportedly not amused by Sri Lanka’s edict to either relocate or redesign his proposed Colombo casino. Packer’s Australian casino business Crown Ltd. has teamed with local casino operator Rank Holdings on a $350m resort-casino project with the working title of Crown Complex, but the government has told the pair that the proposal didn’t meet certain aesthetic requirements and thus changes were required, including a reduction in the height of the hotel tower, which was supposed to rise 36-storeys.
Crown’s CEO Rowen Craigie and CFO Ken Barton recently flew to Sri Lanka to discuss the matter but the Business Times reported the pair failed to convince the government to rescind the directive. Rank owner Ravi Wijeratne has already paid 20% of the funds to secure the 50-year lease on the property originally targeted for development with the balance coming due within three months. In addition, Crown claims to have spent $20m on the building plans and the last minute switcheroo reportedly has them reconsidering the entire endeavor.
CROWN WARNED ABOUT FOREIGN EXPANSION
Crown’s Sri Lanka woes make a new casino review by the Victorian Commission for Gambling and Liquor Regulation seem like one big ‘I told you so.’ The Commission’s review expressed its misgivings about Crown’s international expansion, saying it remained “cautious” about Crown entering markets with “public sector governance challenges,” specifically singling out Sri Lanka as well as the Belle Grande development under construction in the Philippines as part of the Melco Crown International joint venture. The Commission said it would “closely” monitor Crown’s current and future investments to ensure “compliance with anti-bribery and anti-corruption laws.”
Closer to home, the five-year review of Crown Melbourne generated a raft of statistics underscoring the casino’s potent drawing power and earning ability. Australia’s largest casino attracts 50k visitors a day, generates $1.8b in annual revenue and pays state taxes in excess of $200m per year. But it wasn’t all gravy. The Commission claimed there were 2,957 criminal offences committed on the casino’s premises in the three years ending Oct. 2012. Theft, assault and alcohol-related incidents were the most common infractions, but the Commission singled out loan sharking and money laundering as particular areas of concern.
However, a closer look reveals that, since 2011, a total of three people have merely been suspected of offering high-interest loans to Crown Melbourne gamblers. The concerns about money laundering are simply that; the review notes that money laundering is an “increasingly central and prominent element of organized crime” but makes no concrete allegations of any untoward activity at Crown Melbourne. Also, global crystal meth use has ramped up dramatically in recent years, so Crown Melbourne should be on the lookout for any former high school chemistry teachers whipping up suspiciously pure batches of blue-tinted product in the VIP luxury suites. You know, just in case.