Just when Macau’s gaming market has shown signs of revival in recent months, Australian casino magnate James Packer has suddenly decided to sell down his Melco Crown stake.
Packer’s holding in Melco Crown, which is listed on NASDAQ, is already down to 11.2 percent from 34.3 percent previously.
Packer also quit as chairman and board director of the company and said he plans to sell his remaining stake and exit Macau’s gaming market.
The decision came after 18 Crown Resorts employees, including three Australians, were arrested by authorities in China for allegedly soliciting Chinese high rollers to gamble at Packer’s Australian casinos two months ago.
Packer has expressed “deep concern” about the incident. This might have triggered his exit decision.
The employees arrested included Jason O’Connor, head of Crown’s VIP International team.
They were on a marketing visit to Shanghai. The detention came after a series of raids in four cities across China where casino gambling is illegal.
While such activities are not officially allowed, the authorities have been turning a blind eye.
But with China plugging loopholes to stem capital outflows, things have changed.
Probably spooked by the arrest, Packer got cold feet and lost interest in the Macau business.
News reports say he is keen to devote his energy to his entertainment business in the US.
Packer is a third generation of the Packer family. His grandfather, Frank Packer, started Australian Consolidated Press in 1936.
The business was inherited by Kerry Packer in 1974 and then passed on to his son James Packer in 2000.
The company was then renamed Crown Resorts, one of the world’s top 10 gaming companies.
James Packer, 49, has an estimated net worth of US$3.5 billion, making him the sixth-richest Australian.
When Macau decided to open up its gaming market in 2002, Packer tied up with Melco International Development’s (00200.HK) chairman Lawrence Ho and started a series of big investment projects.
Melco Crown, a joint venture between Melco and Crown, was listed in 2006, with each side holding a 34.3 percent stake.
The Macau gaming business became the biggest source of revenue for Crown Resorts, outstripping the Australian casinos.
But after Packer’s share disposal and the pledge to eventually sell his remaining holdings, his partnership with Ho will also come to an end.
This article appeared in the Hong Kong Economic Journal on Dec. 19
Translation by Julie Zhu
[Chinese version 中文版]
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