Strip resorts landlord makes big bid for Australian casino operator

In the spring of 2019, after it had bought Crown Resorts’ land on the Strip, Wynn Resorts abruptly called off a deal to buy the entire company.

Now another big firm with heavy investments on Las Vegas Boulevard is looking to snap up the Australian casino operator.

Crown announced this week that The Blackstone Group made an unsolicited bid to acquire the company. According to media reports, the deal is worth around $6 billion.

Blackstone already owns a piece of Crown, having picked up nearly 10 percent of its stock last spring after the pandemic hit. By going after the rest, the New York financial giant is wagering that casinos, and tourism more broadly, will eventually bounce back from the ravages of the coronavirus outbreak.

It would also bring an overseas casino operator with a history of aborted ventures in Las Vegas under the control of a powerhouse firm with a portfolio of high-profile casinos on the Strip.

Links to Las Vegas

Blackstone, led by billionaire Stephen Schwarzman, owns The Cosmopolitan of Las Vegas and is the landlord of three properties operated by MGM Resorts International: Bellagio, MGM Grand and Mandalay Bay.

The company, which did not respond to a request for comment, also snapped up apartment complexes, office buildings and other properties in Southern Nevada as part of a real estate buying binge following the market crash of a decade or so ago.

Crown operates casinos in Australia and one in London, but the company and its largest shareholder, billionaire James Packer, have a track record of fizzled development plans in America’s casino capital.

Packer teamed with Texas developer Chris Milam in 2007 on plans for a 142-story casino-resort on the former Wet ’n’ Wild water park site on the north Strip. That same year, he also put $250 million into the company developing the towering Fontainebleau next door for a nearly 20 percent ownership stake.

However, the real estate bubble soon burst, the economy tanked, and Packer’s plans, like those of countless others in the valley, got derailed.

The skyscraper with Milam, Crown Las Vegas, was never built, and the still-unfinished former Fontainebleau went bankrupt in 2009.

Along the way, Crown also reached a $1.75 billion deal in 2007 to buy the company that owned Las Vegas’ Cannery casinos. The sale fell apart in 2009, though Crown invested in the company.

One more try

Packer gambled again on Las Vegas in 2014 when he acquired the vacant former New Frontier site next to Fashion Show mall. His group set out to build the 1,100-room Alon Las Vegas, but Packer reportedly had trouble raising project funds.

Crown bailed on the casino project in 2016 and put the land up for sale. In 2017, Wynn Resorts announced a deal to acquire the still-undeveloped Alon site and some adjacent property — about 38 acres total — for $336 million.

Wynn also called off a possible deal nearly two years ago to acquire Crown itself, a buyout that would have been worth more than $7 billion

Today, there is hope that the coronavirus pandemic is on its way out following a year of chaos, fear and financial hardship. The fallout led to a plunge in tourism to Las Vegas, steep drops in gambling revenue and dark convention halls, saddling the tourism-dependent region with one of the highest unemployment rates in the nation.

Blackstone’s buyout of Crown may not impact Southern Nevada, but it does show that people are willing to bet billions that the gambling industry will mount a comeback.

Las Vegas’ workforce is counting on it.

Contact Eli Segall at esegall@reviewjournal.com or 702-383-0342. Follow @eli_segall on Twitter.