Inside Asian Gaming

INSIDE ASIAN GAMING | July 2008 12 8 James Packer Chairman, Crown Ltd Co-Chairman, Melco Crown Entertainment One of Australia’s richest men, with a net worth estimated by Forbes at US$5.7 billion, James Packer inherited a media and gambling empire from his father, the late Kerry Packer, who died in December 2005. Since assuming control of the then Publishing and Broadcasting Ltd (PBL) in December 2005, James Packer has steadily moved the company’s focus away from the family’s traditional media businesses, and focused on expanding its gaming interests in Macau, Britain and North America. In November 2007, he demerged PBL’s media and gambling businesses, creating two entities—Consolidated Media Holdings and Crown Ltd, with the latter pursuing an aggressive global expansion. Mr Packer’s success in business is a result of his upbringing and early career. His reputedly tough father rebuked tradition and steered James away from university to “toughen up” in the Australian outback by working as a jackeroo. Later, while learning international expansion. Mr Packer pointed to financial turbulence resulting from the crunch as the main reason for his decision last month to scrap a planned US$5 billion Crown project on the Las Vegas Strip, consisting of a 5,000-room hotel and a 324-metre tower, which would have been the highest building in the city. Crown unveiled the project last year, and had originally wanted to build a 575-metre tower, which would have been one of the highest buildings in the world, but the Federal Aviation Administration objected on the grounds that it would be an obstacle for planes landing at McCarran airport. the family business, Packer was exposed to mentors who encouraged him to shun the luxuries of bachelorhood and focus his attention on business affairs. Crown is Australia’s largest and most established casino operator, counting Crown Casino Melbourne and Burswood Casino Perth in its portfolio. Mr Packer made his maiden foray into Asia outside Australia through a joint venture with Lawrence Ho—via the recently renamed Melco Crown Entertainment. The company opened the high-end but modest-sized Crown Macau last year and is set to open the sprawling City of Dreams resort on the Cotai Strip next year. Crown Macau generated lacklustre revenue during its first few months of operation, but after a casino floor redesign and new plan of attack, won the largest share of the lucrative Macau VIP baccarat market in the first quarter of 2008. Central to the new strategy, however, is the offering of a sharply higher commission rate to junket consolidator AMA International, and now that other operators are also raising commissions to remain competitive, Crown Macau’s gains could be eroded as quickly as they were built. The global credit crunch could put a damper on Mr Packer’s aggressive 9 Kazuo Okada Chairman, Aruze Corp Vice-Chairman, Wynn Resorts The value of powerful friends in the gamingindustrycannotbeunderstated,and Kazuo Okada has discovered that a friend in need is a friend indeed. His friendship with Wynn Resorts’ Steve Wynn has opened many doors for Mr Okada’s Tokyo-listed gaming machine supplier Azure, but it has the potential to open a much bigger door for Mr Wynn when casinos are eventually legalised in Japan. The pair’s business relationship began in 2000 when Steve Wynn was looking for new financial backers to open Wynn Las Vegas. Mr Okada answered his call with a substantial investment that netted Aruze an almost 25% stake in Wynn Resorts. Mr Wynn and Mr Okada’s mutual interest in expanding their gaming assets and sales globally has seen them collaborate on a number of projects, including Wynn Macau. Since October 2002,Mr Okada has served as vice chairman on the Wynn Resorts board, affording him an even greater say on the company’s future direction. A self-made billionaire in his own right, Mr Okada’s fortune is the result of Aruze’s success in Japanese pachinko and pachislot machine manufacturing. The machines are one of Japan’s most popular forms of entertainment and Aruze is the second largest manufacturer of them. Over the years, Aruze (formerly Universal Distributing) has expanded into the production of other electronic gaming machines, amusement machines and video games. Today, Aruze holds a manufacturer licence with the Nevada Gaming Commission (thanks in no small part to his friend Steve Wynn’s vocal support) and sells its machines in Macau, the US and Australia. In the company’s 39-year history, the Okada family has managed to retain ownership of a controlling share in Aruze, assuring Mr Okada also has the final say on his company’s future. Aruze’s 24-player baccarat machines sit on the gaming floor at Wynn Macau, and Steve Wynn honoured Mr Okada and his family by naming Wynn Resorts’ Japanese restaurants Okada. Their friendship will truly have borne fruit if Wynn Resorts and Aruze successfully gain a licence to operate a property in Japan.