No dice: Crown puts Vegas plan on ice, by Vanda Carson - The Sydney Morning Herald - 5th June 2008

Financiers have failed to support James Packer's ambition to build the world's tallest casino in Las Vegas.

Crown, of which Mr Packer owns 38%, announced yesterday that the plan to build a $5.2 billion casino with American partners had been thwarted by the global credit crunch.

The partners were forced to withdraw as their option to buy the site on the Las Vegas strip expires at the end of the month. They had extended the time to make the final payment several times.

Crown, which had hoped to call the casino Crown Las Vegas, has written off the $44 million it contributed to the joint venture for the deposit to buy the site from vendor Archon Corp.

Crown had a 37.5% stake in the joint venture with partners including Texan developer Chris Milam and private-equity company York Capital Management.

The 11-hectare site is in a prime position on the Las Vegas strip, down the northern end that had been slated for a revival.

The US sharemarket downturn means the revival is under a cloud, with some Las Vegas casinos laying off staff and others experiencing slower turnover.

The owner of Tropicana casino has filed for bankruptcy and four of the largest gambling companies in the US reported earnings slumps in the last quarter.

While gambling has historically been unaffected by slumps in discretionary spending, casino-resorts are no longer immune as almost a third of their earnings are from hotel, restaurant and entertainment facilities.

The site earmarked for Crown Las Vegas was a former Wet'n'Wild slide and pool-based amusement park, one of the last non-gambling related entertainment projects in the centre of Las Vegas. Before Crown's investment, the project had received approval for a 142-storey tower known as Las Vegas Tower. The US Federal Aviation Administration later forced the height to be reduced for fear of causing flight problems with the airport.

The failure does not mean that Mr Packer is left without a presence in Las Vegas. He owns a $300 million stake in the Fontainebleau Resorts casino and hotel development next door, due to open late next year.

Crown also owns three casinos on the Las Vegas outskirts, which are more downmarket and cater for local instead of interstate gamblers.

Crown shares closed 2¢ higher at $10.44.

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