Australia's most famous beachfront is set for a $6 million makeover with plans to build a new surf club.
Despite being stripped of a $1.7 million federal Government grant last year, North Bondi Surf Lifesaving Club has lodged plans with Waverley Council for a modern, white, three-storey building at the world famous tourist spot.
Opposition leader and local Wentworth MP Malcolm Turnbull - who has been a member of the club since childhood - has personally donated $100,000, while the state government kicked in $500,000 and Waverley Council $750,000.
Members and nippers have also been slugged a building levy to help fund the redevelopment. The existing club is riddled with concrete cancer and has no access for the disabled.
It also lacks adequate storage space for all its surfcraft.
Its replacement will have a basement storage area, a gym, a boat shed and a function room.
Club administration director Karen Scott said about half the needed money had been raised and members were not keen to borrow the rest.
She added: "We're not looking at rebuilding until we've raised all the funds. We're still fairly heavily involved in a fund-raising effort. That was put back pretty severely when the Federal Government stripped our grant.
The grant was awarded in 2007 by the previous Coalition government, but scrapped by Labor in last year's Budget.
The DA may be reviewed if the club cannot raise the balance. Waverley Mayor Sally Betts said council had set a benchmark of $750,000 for several of its surf clubs and it was unlikely council would give North Bondi any more money.
Mr Turnbull has said his father used to take him to the club before he could walk, and last year accused Regional Development Minister Anthony Albanese of pulling the grant to punish Bondi because it was in his electorate.
Once approved, the DA is valid for five years. The plans will be on display until July 17. (Credit: The Sunday Telegraph)
Monday, June 22, 2009
Saturday, June 20, 2009
Packer's $18m digs set for demolition, by Jonathan Chancellor - The Sydney Morning Herald - 20th June 2009
The billionaire James Packer and his wife, Erica, are understood to have spent $18 million on their first family property.
But neighbours do not expect them to be moving in until they demolish and rebuild the hillside Vaucluse holding.
Their disguised purchase was fronted by Matthew Csidei, a former housemate of Mr Packer, in an attempt to keep the vendor's price expectations as low as possible.
It was listed with $17 million-plus hopes through the agents Bill Bridges and Craig Pontey by the executors of the estate of the oil shale pioneer Sir Ian McFarlane, who died last year.
It comes with 2374 square metres of land - plenty of space for the Packers' 10-month-old daughter, Indigo, to enjoy a backyard away from the paparazzi.
The sale scuttles the entrepreneur Deke Miskin's hope that the Packers would buy the Point Piper harbourfront home Altona, in a deal where Mr Miskin would have secured Mr Packer's redundant Bondi Beach complex.
But there is still speculation that the Packers, who married in June 2007, may yet expand their Bellevue Hill holdings with the purchase of the 1890 property Leura, listed for $50 million.
Leura sits between Cairnton, Mr Packer's mother Roslyn's residence, and Winston, his sister, Gretel's house.
Any demolition of the Vaucluse house may cause controversy, as it is a landmark Guilford Bell house designed in the early 1970s for McFarlane.
Its proposed heritage listing by Woollahra Council was successfully opposed by McFarlane's solicitor, Robert Minter, in 2006.
McFarlane's valuer said heritage listing would diminish the property's value by $4 million, as the house's colonnade was an example of a style that was no longer popular. (Credit: The Sydney Morning Herald)
But neighbours do not expect them to be moving in until they demolish and rebuild the hillside Vaucluse holding.
Their disguised purchase was fronted by Matthew Csidei, a former housemate of Mr Packer, in an attempt to keep the vendor's price expectations as low as possible.
It was listed with $17 million-plus hopes through the agents Bill Bridges and Craig Pontey by the executors of the estate of the oil shale pioneer Sir Ian McFarlane, who died last year.
It comes with 2374 square metres of land - plenty of space for the Packers' 10-month-old daughter, Indigo, to enjoy a backyard away from the paparazzi.
The sale scuttles the entrepreneur Deke Miskin's hope that the Packers would buy the Point Piper harbourfront home Altona, in a deal where Mr Miskin would have secured Mr Packer's redundant Bondi Beach complex.
But there is still speculation that the Packers, who married in June 2007, may yet expand their Bellevue Hill holdings with the purchase of the 1890 property Leura, listed for $50 million.
Leura sits between Cairnton, Mr Packer's mother Roslyn's residence, and Winston, his sister, Gretel's house.
Any demolition of the Vaucluse house may cause controversy, as it is a landmark Guilford Bell house designed in the early 1970s for McFarlane.
Its proposed heritage listing by Woollahra Council was successfully opposed by McFarlane's solicitor, Robert Minter, in 2006.
McFarlane's valuer said heritage listing would diminish the property's value by $4 million, as the house's colonnade was an example of a style that was no longer popular. (Credit: The Sydney Morning Herald)
Tuesday, June 16, 2009
Chips down in Crown's Gateway, by Vanda Carson - The Sydney Morning Herald - 16th June 2009
Crown's Canadian casino joint venture with Macquarie Bank is in danger of breaching its banking covenants, credit rating agency Moody's has warned.
Moody's has downgraded the rating of Gateway Casinos and Entertainment by two notches to a level placing it in the category of companies "subject to a very high credit risk". The agency says Gateway may be forced to write down the value of its nine hotel-casino properties in western Canada.
It says the company's debt-to-earnings ratio is dangerously high at more than 10 times.
The Moody's rating now sits at Caa2, which is a junk rating in 17th position on a scale of 21.
Gateway has been cutting costs at its casinos since the start of the year, asking staff to take unpaid leave and forcing others to cut their hours.
But the response may not have been sufficient to alleviate the pressure of a hefty debt load.
While Crown and Macquarie Bank do not release details of the Canadian casinos' financial performance, it is believed that revenue is down by up to 20 per cent across its casinos, including two in Vancouver, one in Edmonton and six in the wider region of western Canada.
"Gateway's capital structure is not sustainable in its current form, and may require some form of restructuring that involves a level of impairment," Moody's said in a statement.
Crown paid $224 million for the share in the casinos at the top of the market in 2007. It has written down the value by $49 million and recorded a loss of $14.2 million in its December accounts.
Macquarie listed the Canadian investment as "held for sale" in its September half-year report. (Credit: The Sydney Morning Herald)
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Moody's has downgraded the rating of Gateway Casinos and Entertainment by two notches to a level placing it in the category of companies "subject to a very high credit risk". The agency says Gateway may be forced to write down the value of its nine hotel-casino properties in western Canada.
It says the company's debt-to-earnings ratio is dangerously high at more than 10 times.
The Moody's rating now sits at Caa2, which is a junk rating in 17th position on a scale of 21.
Gateway has been cutting costs at its casinos since the start of the year, asking staff to take unpaid leave and forcing others to cut their hours.
But the response may not have been sufficient to alleviate the pressure of a hefty debt load.
While Crown and Macquarie Bank do not release details of the Canadian casinos' financial performance, it is believed that revenue is down by up to 20 per cent across its casinos, including two in Vancouver, one in Edmonton and six in the wider region of western Canada.
"Gateway's capital structure is not sustainable in its current form, and may require some form of restructuring that involves a level of impairment," Moody's said in a statement.
Crown paid $224 million for the share in the casinos at the top of the market in 2007. It has written down the value by $49 million and recorded a loss of $14.2 million in its December accounts.
Macquarie listed the Canadian investment as "held for sale" in its September half-year report. (Credit: The Sydney Morning Herald)
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Saturday, June 13, 2009
Tom Cruise, Katie Holmes to stay in Crown's most expensive suite - Herald Sun - 13th June 2009
Hollywood's most famous Scientologists, Tom Cruise and Katie Holmes, will live like royalty when they take up residence at Crown's most expensive hotel suite this month.
TomKat will be guests of owner and fellow Scientologist James Packer when Holmes comes to town to film the big budget thriller, Don't Be Afraid Of The Dark.
The couple will stay in the newly refurbished palatial top floor of Crown Towers.
The suite, which normally costs $27,500 a night and takes up the entire 39th floor, is being refurbished as part of the $50 million refit of Crown Towers.
As guests, Cruise and Holmes will have panoramic views of the city, a butler and nanny service on call 24 hours a day.
The suite features a private lift, four bedrooms, spacious marble-lined bathrooms, dining areas, huge walk-in robes, studies, lounges, kitchens and powder rooms.
The main bedroom is said to be bigger than an average suburban house.
The refurbishment is expected to be completed in time for the couple's arrival.
It is unclear if TomKat will be charged by their good friend and casino-owner, Mr Packer. Cruise and Holmes will join an elite group to have stayed in the suite.
Ranked among the most extravagant and expensive hotel suites in the world, Room 3918 has been used by some of the world's biggest gamblers.
Not even former US president Bill Clinton was able to dislodge high roller George Lu from Room 3918 back in 2001.
Mr Clinton was later heard to remark: "I must meet this man, George Lu."
Crown casino declined to return the Herald Sun's calls, requesting questions by email, which also went unanswered. (Credit: Herald Sun)
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TomKat will be guests of owner and fellow Scientologist James Packer when Holmes comes to town to film the big budget thriller, Don't Be Afraid Of The Dark.
The couple will stay in the newly refurbished palatial top floor of Crown Towers.
The suite, which normally costs $27,500 a night and takes up the entire 39th floor, is being refurbished as part of the $50 million refit of Crown Towers.
As guests, Cruise and Holmes will have panoramic views of the city, a butler and nanny service on call 24 hours a day.
The suite features a private lift, four bedrooms, spacious marble-lined bathrooms, dining areas, huge walk-in robes, studies, lounges, kitchens and powder rooms.
The main bedroom is said to be bigger than an average suburban house.
The refurbishment is expected to be completed in time for the couple's arrival.
It is unclear if TomKat will be charged by their good friend and casino-owner, Mr Packer. Cruise and Holmes will join an elite group to have stayed in the suite.
Ranked among the most extravagant and expensive hotel suites in the world, Room 3918 has been used by some of the world's biggest gamblers.
Not even former US president Bill Clinton was able to dislodge high roller George Lu from Room 3918 back in 2001.
Mr Clinton was later heard to remark: "I must meet this man, George Lu."
Crown casino declined to return the Herald Sun's calls, requesting questions by email, which also went unanswered. (Credit: Herald Sun)
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Sunday, June 07, 2009
Crown hits jackpot with new tax deal, by Melissa Fyfe - The Age - 7th June 2009
The State Government's controversial deal with Crown Casino will add $41 million to the gaming venue's bottom line by 2015, according to a stockmarket analysis of the new arrangement.
A Deutsche Bank evaluation found that Crown will make more money from the deals 150 extra tables than it will lose from the State Government's tax increase.
After 2015, the deal will be worth an extra $10 million a year to Crown, the bank's analysts found.
Under the new arrangement — the biggest expansion of the casino in a decade — Crown's tax rate on its poker machines will lift from 21 per cent to 32 per cent in exchange for a boost to its gaming tables from 350 to 500.
Crown will also be able to double its poker tables within this limit and will no longer pay the $11 million-a-year levy that helped fund the state's health system.
The State Government wanted to change Crown's taxes following its reforms to the gaming industry, due in 2012. The deal, which locks in Crown's tax rates until 2022, was struck by Bruce Warner, a private negotiator hired by Treasury.
Mr Warner confirmed to The Sunday Age that billionaire Crown boss James Packer was present at several meetings during the 10-day negotiations earlier this year.
When the deal was announced last month, Gaming Minister Tony Robinson said that "Victorians would think this was a good deal" and Crown would think the deal was "less advantageous going forward".
But the Deutsche Bank report on the deal, by analysts Mark Wilson and Daniel Pi, describes the deal as a positive one for Crown, with an initial $10 million bottom-line loss in the financial years 2010 and 2011 changing to a $3 million net benefit in 2012, $19 million in 2013 and 2014 and a $10 million net benefit in 2015 and beyond.
The tax increase, the report said, "will be moderated by the roll-out of additional tables and the removal of the health benefit levy" (a tax on large gaming operators that helps fund the health system).
After claiming that the deal "virtually aligned" Crown's poker machine tax rates to those faced by its hotel competitors, the Government has now acknowledged that, after 2012, this will not be the case.
The machines in hotels most comparable to Crown's will be taxed at 50 and 58 per cent. In comparison, the casino's machines will face a 32 per cent tax on average monthly revenue. This means Crown gets a tax break on its poker machines of up to 80 per cent compared to its competitors after 2012.
Despite comments in Parliament last week about the deal aligning tax rates on poker machines, the State Government now says the deal is about aligning Crown's "overall tax rates" with its competitors.
Matt Nurse, a spokesman for the Treasurer John Lenders, said the Brumby Government has "effectively ended the tax break given to the casino, set up by the Kennett government, by virtually aligning the overall tax rates paid by the casino and the gaming operators".
Mr Nurse nominated another Crown tax, the super tax, as the reason the rates would be "virtually aligned". Under this tax, the casino must pay to the Government between 1 and 20 per cent on player losses of more than $880 million.
But Mr Nurse would not tell The Sunday Age how this tax may have changed under the deal or how much the Government collects under this tax. More details would be released, he said, when legislation came before Parliament.
Mr Lenders has said the Government stood to earn a $60 million tax windfall from the deal.
The deal has infuriated some of Crown's post-2012 competitors, the Australian Hotels Association and Clubs Victoria. "We would be delighted if the Government gave us the benefit it has given Crown — we would love to lock in our tax rate for 13 years," said the AHA's Victorian chief executive Brian Kearney.
Crown spokesman Gary O'Neill had no comment on the Deutsche Bank analysis. (Credit: The Age)
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A Deutsche Bank evaluation found that Crown will make more money from the deals 150 extra tables than it will lose from the State Government's tax increase.
After 2015, the deal will be worth an extra $10 million a year to Crown, the bank's analysts found.
Under the new arrangement — the biggest expansion of the casino in a decade — Crown's tax rate on its poker machines will lift from 21 per cent to 32 per cent in exchange for a boost to its gaming tables from 350 to 500.
Crown will also be able to double its poker tables within this limit and will no longer pay the $11 million-a-year levy that helped fund the state's health system.
The State Government wanted to change Crown's taxes following its reforms to the gaming industry, due in 2012. The deal, which locks in Crown's tax rates until 2022, was struck by Bruce Warner, a private negotiator hired by Treasury.
Mr Warner confirmed to The Sunday Age that billionaire Crown boss James Packer was present at several meetings during the 10-day negotiations earlier this year.
When the deal was announced last month, Gaming Minister Tony Robinson said that "Victorians would think this was a good deal" and Crown would think the deal was "less advantageous going forward".
But the Deutsche Bank report on the deal, by analysts Mark Wilson and Daniel Pi, describes the deal as a positive one for Crown, with an initial $10 million bottom-line loss in the financial years 2010 and 2011 changing to a $3 million net benefit in 2012, $19 million in 2013 and 2014 and a $10 million net benefit in 2015 and beyond.
The tax increase, the report said, "will be moderated by the roll-out of additional tables and the removal of the health benefit levy" (a tax on large gaming operators that helps fund the health system).
After claiming that the deal "virtually aligned" Crown's poker machine tax rates to those faced by its hotel competitors, the Government has now acknowledged that, after 2012, this will not be the case.
The machines in hotels most comparable to Crown's will be taxed at 50 and 58 per cent. In comparison, the casino's machines will face a 32 per cent tax on average monthly revenue. This means Crown gets a tax break on its poker machines of up to 80 per cent compared to its competitors after 2012.
Despite comments in Parliament last week about the deal aligning tax rates on poker machines, the State Government now says the deal is about aligning Crown's "overall tax rates" with its competitors.
Matt Nurse, a spokesman for the Treasurer John Lenders, said the Brumby Government has "effectively ended the tax break given to the casino, set up by the Kennett government, by virtually aligning the overall tax rates paid by the casino and the gaming operators".
Mr Nurse nominated another Crown tax, the super tax, as the reason the rates would be "virtually aligned". Under this tax, the casino must pay to the Government between 1 and 20 per cent on player losses of more than $880 million.
But Mr Nurse would not tell The Sunday Age how this tax may have changed under the deal or how much the Government collects under this tax. More details would be released, he said, when legislation came before Parliament.
Mr Lenders has said the Government stood to earn a $60 million tax windfall from the deal.
The deal has infuriated some of Crown's post-2012 competitors, the Australian Hotels Association and Clubs Victoria. "We would be delighted if the Government gave us the benefit it has given Crown — we would love to lock in our tax rate for 13 years," said the AHA's Victorian chief executive Brian Kearney.
Crown spokesman Gary O'Neill had no comment on the Deutsche Bank analysis. (Credit: The Age)
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Friday, June 05, 2009
Tuesday, June 02, 2009
James Packer's Macau dream rocks on, by Andrew Carswell - Herald Sun - 2nd June 2009
His fortune may have shrunk by billions of dollars but James Packer has opened the doors to what is arguably his biggest gamble yet.
Amid fanfare and fireworks, the first chips went down at the $2.9 billion City of Dreams - Mr Packer's second joint-venture casino to be built in Macau, the former Portuguese colony bordering southern China.
The increasingly reclusive billionaire stepped back into the spotlight last night to cut the ribbon to the new casino, alongside his chief partner in Melco Crown Entertainment, Lawrence Ho.
Christening one of its centrepieces, the Hard Rock Hotel, Mr Packer and Mr Ho smashed guitars hours before last night's celebrity-studded opening bash.
The City of Dreams stares directly across Macau's glitzy Cotai Strip at the Venetian, the world's biggest casino.
The property - almost 40,000 square metres - features 2000 gaming machines and tables, three hotels, a huge shopping, restaurant and entertainment precinct, and a spectacular multi-media attraction dubbed The Bubble.
"It is a crucial project," Lawrence Ho said.
"What is good for us . . . is good for our competitors and is good for Macau."
Experts believe there is much riding on the performance of the City of Dreams.
While Mr Packer has remained tight-lipped about the forecasts for the City of Dreams, Mr Ho has been brutally honest about the high-stakes game the men are playing in the middle of a global recession.
A poor reception for it may spell "the endgame for us," Mr Ho said last month.
"The investment case (for Melco Crown) basically comes down to how City of Dreams goes, so if you want to call it a sink-or-swim moment, well I guess it is," an analyst told BusinessDaily.
"Across the road you have the Venetian. That does about $500 million a year (in pre-tax earnings). The market is generally expecting City of Dreams to do $300 million. If it does that it's a success."
Since taking his late father Kerry's fortune above $6 billion, Mr Packer's net wealth has plummeted to $3 billion in the past year as shares in his divided kingdom - Crown Ltd and Consolidated Media Holdings - halved.
He is now only ranked the sixth richest Australian.
As well as Mr Packer staking much of his fortune on the venture, City of Dreams will be seen as an all-important test case for the future of Macau's gaming industry.
A 40-minute boat ride from Hong Kong, Macau now takes more gambling dollars than Las Vegas and Atlantic City combined.
But an attempt last year to stem the flow of visitors from mainland China dealt a dud hand to casino operators and put the brakes on the growth of the industry.
Mr Packer and Mr Ho hold a licence to build a third casino in Macau, but they remain publicly uncommitted to plans as yet. (Credit: Herald Sun)
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Amid fanfare and fireworks, the first chips went down at the $2.9 billion City of Dreams - Mr Packer's second joint-venture casino to be built in Macau, the former Portuguese colony bordering southern China.
The increasingly reclusive billionaire stepped back into the spotlight last night to cut the ribbon to the new casino, alongside his chief partner in Melco Crown Entertainment, Lawrence Ho.
Christening one of its centrepieces, the Hard Rock Hotel, Mr Packer and Mr Ho smashed guitars hours before last night's celebrity-studded opening bash.
The City of Dreams stares directly across Macau's glitzy Cotai Strip at the Venetian, the world's biggest casino.
The property - almost 40,000 square metres - features 2000 gaming machines and tables, three hotels, a huge shopping, restaurant and entertainment precinct, and a spectacular multi-media attraction dubbed The Bubble.
"It is a crucial project," Lawrence Ho said.
"What is good for us . . . is good for our competitors and is good for Macau."
Experts believe there is much riding on the performance of the City of Dreams.
While Mr Packer has remained tight-lipped about the forecasts for the City of Dreams, Mr Ho has been brutally honest about the high-stakes game the men are playing in the middle of a global recession.
A poor reception for it may spell "the endgame for us," Mr Ho said last month.
"The investment case (for Melco Crown) basically comes down to how City of Dreams goes, so if you want to call it a sink-or-swim moment, well I guess it is," an analyst told BusinessDaily.
"Across the road you have the Venetian. That does about $500 million a year (in pre-tax earnings). The market is generally expecting City of Dreams to do $300 million. If it does that it's a success."
Since taking his late father Kerry's fortune above $6 billion, Mr Packer's net wealth has plummeted to $3 billion in the past year as shares in his divided kingdom - Crown Ltd and Consolidated Media Holdings - halved.
He is now only ranked the sixth richest Australian.
As well as Mr Packer staking much of his fortune on the venture, City of Dreams will be seen as an all-important test case for the future of Macau's gaming industry.
A 40-minute boat ride from Hong Kong, Macau now takes more gambling dollars than Las Vegas and Atlantic City combined.
But an attempt last year to stem the flow of visitors from mainland China dealt a dud hand to casino operators and put the brakes on the growth of the industry.
Mr Packer and Mr Ho hold a licence to build a third casino in Macau, but they remain publicly uncommitted to plans as yet. (Credit: Herald Sun)
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Packer bets big on Dreams of Macau, by Miriam Steffens - The Sydney Morning Herald - 2nd June 2009
As James Packer's $US2.4 billion ($A3 billion) City of Dreams casino opened with great fanfare in Macau last night, after more than three years under construction, it marked the biggest gamble for the 41-year-old billionaire in his global gambling expansion.
A lot is riding on the success of the 39,000-square-metre casino built on a former swamp in the gaming mecca.
It is designed to be the flagship of Mr Packer's Asian gambling empire which he is building with Lawrence Ho, son of the Hong Kong tycoon Stanley Ho.
At stake are not only about $US500 million Crown has invested in its 36 per cent shareholding in the venture, but Mr Packer's reputation as a businessman, which has been bruised as his wealth more than halved over the past year in the global financial meltdown and after a series of ill-fated US casino investments.
But the opening of the prestige casino, which features a shopping precinct, its own bubble-shaped theatre, and close to two dozen restaurants and bars, comes at a challenging time. Travel demand to Macau has been hurt by the world recession and headwinds from Beijing, which last year imposed new visa restrictions to limit the number of mainland Chinese gambling in the former Portuguese colony.
Macau's gambling revenue and visitor arrivals fell every month except one between January 2008 and April. Melco Crown Entertainment, the Packer-Ho venture, posted a first-quarter loss of $US35.3 million, down from a profit of $US43.2 million a year earlier, as the decline in visitors hurt revenues at its first Macau casino, the Altira, which opened in 2007.
City of Dreams, located opposite Las Vegas Sands' huge Venetian Macao complex, starts out with about 520 table games, 1350 gaming machines and two hotels — Crown Towers and the Hard Rock Hotel — with a combined 600 guest rooms. A third hotel with 800 rooms should be finished later this year.
That compares with 350 gaming tables and about 1000 hotel rooms at Melbourne's Crown Casino, which will be expanded to about 1600 rooms by mid-2010.
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(Credit: The Age)
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A lot is riding on the success of the 39,000-square-metre casino built on a former swamp in the gaming mecca.
It is designed to be the flagship of Mr Packer's Asian gambling empire which he is building with Lawrence Ho, son of the Hong Kong tycoon Stanley Ho.
At stake are not only about $US500 million Crown has invested in its 36 per cent shareholding in the venture, but Mr Packer's reputation as a businessman, which has been bruised as his wealth more than halved over the past year in the global financial meltdown and after a series of ill-fated US casino investments.
But the opening of the prestige casino, which features a shopping precinct, its own bubble-shaped theatre, and close to two dozen restaurants and bars, comes at a challenging time. Travel demand to Macau has been hurt by the world recession and headwinds from Beijing, which last year imposed new visa restrictions to limit the number of mainland Chinese gambling in the former Portuguese colony.
Macau's gambling revenue and visitor arrivals fell every month except one between January 2008 and April. Melco Crown Entertainment, the Packer-Ho venture, posted a first-quarter loss of $US35.3 million, down from a profit of $US43.2 million a year earlier, as the decline in visitors hurt revenues at its first Macau casino, the Altira, which opened in 2007.
City of Dreams, located opposite Las Vegas Sands' huge Venetian Macao complex, starts out with about 520 table games, 1350 gaming machines and two hotels — Crown Towers and the Hard Rock Hotel — with a combined 600 guest rooms. A third hotel with 800 rooms should be finished later this year.
That compares with 350 gaming tables and about 1000 hotel rooms at Melbourne's Crown Casino, which will be expanded to about 1600 rooms by mid-2010.
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(Credit: The Age)
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Monday, June 01, 2009
Packer confident of his Macau gamble - The Australian - 30th May 2009
On Monday morning, James Packer will wake up in Macau to his moment of truth.
In the 3 1/2 years since the death of his legendary father, Kerry, Packer has transformed the family empire from one focused predominantly on media into the international casinos conglomerate Crown.
Monday's opening of Macau's City of Dreams casino -- one of the Chinese territory's most opulent and expensive -- is a crucial psychological marker on whether that transformation has been successful.
One of Packer's close confidants told The Weekend Australian this week the 42-year-old "always had a real belief in Macau and he's backed his belief". "City of Dreams is the culmination of that," the friend says. "It will be the jewel in the crown, in terms of size, of all of his casinos."
But with size comes risk. Packer has bet hundreds of millions of dollars of his money -- but more importantly his reputation as a major player on the international gaming scene alongside casino legends Stanley Ho, Steve Wynn and Sheldon Adelson -- on Macau.
Packer and Stanley Ho's son, Lawrence Ho -- his partner in the Melco Crown Entertainment joint venture behind the casino -- unveiled their plans for City of Dreams in the midst of an unseemly rush to develop a new Asian Las Vegas.
But today, such developments face pretty strong headwinds. In particular, gaming revenues in Macau are under pressure as the financial crisis and restrictions on Chinese citizens travelling to the former Portuguese colony bite. Even major players, such as the Las Vegas Sands, have reportedly delayed projects. Packer's fortunes have certainly fallen in line with the global crisis, with BRW magazine this week estimating his worth at $3 billion, down from $6.1 billion this time last year and the $7.3 billion he reportedly inherited from his father.
Still, Crown shares, of which the Packer family owns 36 per cent, have rallied strongly ahead of the City of Dreams opening. The run was spurred in part by Crown's escape from a proposed $US1.75 billion ($2.2 billion) takeover of Cannery Casino Resorts in the US. But one source close to Packer describes him as "quietly confident" about the future of City of Dreams. "I think we benefited from the fact there are a hell of a lot of cranes up there on unfinished projects," he says. "It is the only big new casino opening, and it will be the only one for some time."
The importance of Monday night's spectacular opening ceremony and first few months of trading are not lost on Melco Crown finance chief Simon Dewhurst. "City of Dreams is our flagship development," he says.
"It has consumed over 60 per cent of our investment capital and it represents our first opportunity in Macau to compete for the integrated resort middle ground that represents the future for the market. The opening of CoD marks the culmination of more than six years hard work. We are taking a transformational step from being primarily a development company, to being primarily an operating company."
Crown chief Rowen Craigie agrees the opening of City of Dreams represents "a major milestone". He says: "City of Dreams will be an exciting and attractive property and will benefit from being the only major casino entertainment complex to open in Macau in 2009."
City of Dreams, on Macau's popular Cotai strip, will be Melco Crown's second in the territory, following the opening of the $US760 million Crown Macau (now the Altira Macau) in 2007.
Analysts say City of Dreams is the first casino in Macau to break the $US2billion investment threshold. Its opening will be the culmination of a process that started before Kerry Packer's death when James settled on Macau as the first focal point of his global gaming ambitions.
In November 2004, Packer struck a joint venture agreement with the Hong Kong-listed leisure and entertainment group, Melco Development, run by Lawrence Ho. While there was little concrete announced at the time, it was soon made clear the joint venture company had big plans.
Once his father died in December 2005, Packer moved quickly to transform what was then the media-driven Publishing and Broadcasting Limited into a gaming empire. This transformation was highlighted late in 2006 with the top-of-the-market sale of PBL Media -- owner of the Nine Network and ACP Magazines -- to private equity firm CVC Asia Pacific for more than $5billion, just before the value of the assets started to decline amid both structural and cyclical change.
The PBL empire was left as largely a casino-focused one, and a subsequent split of the group in 2007 saw the casino assets hived off into the new casinos group, Crown.
But the move that signalled Packer's serious intent for gaming in Macau was his joint move with Melco just three months after his father's death to buy Macau's last available casino sub-concession from Wynn, the US casino entrepreneur, for $US900 million. The move cemented Packer and Ho as major players at the table of Macau's casino industry.
Altira Macau and City of Dreams are now held through Melco Crown Entertainment, which is listed on the Nasdaq index in the US and counts Crown as a 36.4 per cent shareholder.
Since 2006, Crown has also made a series of casino purchases independent of the Melco Crown venture in North America. These include stakes in the US-based Fontainebleau Resorts, Canada's Gateway Resorts group, Stations Casino Group and Harrah's Entertainment, underlining Packer's intense focus on gaming assets.
With the fall-off in casino values worldwide since the purchases, critics -- acting with the benefit of 20/20 hindsight -- have questioned the wisdom of his moves in both Macau and North America shortly before the global economic downturn. Even Crown's Rowen Craigie reportedly admitted earlier this year that the group had bought some of its US assets at the top of the market.
Crown's woes in the US were on full display in the company's interim profit result, with the group posting a reported net loss of $409.7 million due to a non-recurring $454.9 million writedown to the value of its minority US casino investments -- namely Fontainebleau, Stations and Harrah's.
But Packer's supporters assert that while there has been a fall in value of the US ventures in particular, he is well up on his Macau investments. After its $US45 million investment in Melco Crown's $US180 million capital raising this month, Crown has now invested a total of $US500 million in the group. That stake is now worth more than $US1 billion. Friends point out that Packer has effectively doubled his money and, in the process, gained a major say in a business that has two casinos fully funded, one of only six casino licences in Macau, and assorted hotels, retail complexes and entertainment venues supporting the casinos.
Melco Crown is not without problems. It booked a March quarter net loss of $US35.3 million, compared to a profit of $US43.2 million for the same period last year, prompting Ho to admit the casino market was not out of the woods yet. One analyst noted that Crown Macau had a "very poor opening" in 2007, with Packer's reputation suffering as a result. City of Dreams, he says, represents "a very critical moment".
Then again, Deutsche Bank last week raised its price target on Melco Crown from $US4.40 to $US6 a share, saying it was "now more confident on the success of City of Dreams after we walked through the property early this month".
City of Dreams certainly sounds impressive. Ho promises the water- and fantasy-themed complex will be a "next-generation resort like no other in Asia, or perhaps the world".
Located directly opposite the biggest casino in Macau -- the Las Vegas Sands Venetian Macau -- it will boast several distinctly branded casino floors, three world-class hotels and a shopping precinct to be known as The Boulevard.
On Monday, Melco Crown opens the first phase of that project, which will include the Crown Towers and Hard Rock hotels, 20 bars and restaurants, The Boulevard, plus a casino with 520 gaming tables (a third of which will be VIP) and 1350 gaming machines. It will be the only major casino to open in Macau this calendar year.
The casino's Bubble Theatre will feature a 10-minute "Dragon's Treasure" multi-media lights show. Theatre of Dreams, a 2000-seat theatre, will feature a Cirque Du Soleil-style water production when it opens in the December half. By December, the third hotel, the Grand Hyatt, will open, giving the complex a total of 1400 rooms. And there is even the future prospect of a further apartment development in the complex, subject to Macau regulatory approval. Melco's Dewhurst says Melco Crown is "very confident". He says: "We have spent a very significant amount of time, energy and resource into understanding what's working and what's not working throughout the market. We think City of Dreams is right."
Success for Melco Crown and City of Dreams will come down to a number of things. But one key measure will be foot traffic. "We expect that we will have something in the order of 35,000 guests a day passing through the property," Dewhurst says. "I have no doubt that we will have in excess of that number on the first day. In the first 100 days what's important for us is that on any of those 100 days we see that volume of traffic into the building."
In the current climate, that could be a challenge. Its performance will hinge on the recovery of the Asian economy -- and in particular how quickly Asian high-rollers return to the territory's casinos after the tough recent times.
Credit Suisse analyst Gabriel Chan said in a note last week that "with concerns about swine flu remaining vital, and signs that the recovery pace of the Chinese economy may have slowed, we see certain execution risks for the opening".
Indeed, visitor numbers to Macau, as recorded by the Statistics and Census Service, were down 3.5 per cent in April from the same period last year and steady over the previous month. Visitors from mainland China were down 13.5 per cent year on year.
Gaming revenues have suffered as a result of weaker visitor arrivals, but the pace of the decline has stabilised in the past few months. And there are hopes, from Ho down, for a swift rebound, partly driven by the buzz from the City of Dreams opening.
Some analysts believe that as Macau's most expensive casino, City of Dreams may be able to take market share from other players.
Janet Brashear, senior gaming analyst with US investment house Sanford C. Bernstein, says she expects City of Dreams to "make a splash, garnering $US1.4 billion in gross gaming revenues in 2010 and a 10 per cent share of the market". She also predicts City of Dreams could cannibalise the market share of some of its competitors in Macau, such as the Venetian Macau and Wynn resort.
For analysts, success will come down to one thing -- City of Dreams achieving an earnings before interest, tax, depreciation and amortisation of about $US300 million in the first year.
"You look across the road at the Venetian and they're doing about $US120 million EBITDA a quarter -- $US500 million a year," says one analyst. "So you would have thought $US300 million would be achievable for City of Dreams."
If City of Dreams achieves better than that -- say $US500 million a year -- then it will be a strong position against its rivals. There is growing speculation that casino giant MGM may have to sell its Macau interests after US regulators raised concerns about its local joint venture partner, Pansy Ho -- the daughter of Stanley and brother of Lawrence. Las Vegas Sands is also looking to sell some plots.
One close Packer confidant is hedging his bets ahead of Monday's event. He says: "On the assumption that the Macau economy will start to improve, Melco and City of Dreams are going to be in a very good place." (The Australian)
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In the 3 1/2 years since the death of his legendary father, Kerry, Packer has transformed the family empire from one focused predominantly on media into the international casinos conglomerate Crown.
Monday's opening of Macau's City of Dreams casino -- one of the Chinese territory's most opulent and expensive -- is a crucial psychological marker on whether that transformation has been successful.
One of Packer's close confidants told The Weekend Australian this week the 42-year-old "always had a real belief in Macau and he's backed his belief". "City of Dreams is the culmination of that," the friend says. "It will be the jewel in the crown, in terms of size, of all of his casinos."
But with size comes risk. Packer has bet hundreds of millions of dollars of his money -- but more importantly his reputation as a major player on the international gaming scene alongside casino legends Stanley Ho, Steve Wynn and Sheldon Adelson -- on Macau.
Packer and Stanley Ho's son, Lawrence Ho -- his partner in the Melco Crown Entertainment joint venture behind the casino -- unveiled their plans for City of Dreams in the midst of an unseemly rush to develop a new Asian Las Vegas.
But today, such developments face pretty strong headwinds. In particular, gaming revenues in Macau are under pressure as the financial crisis and restrictions on Chinese citizens travelling to the former Portuguese colony bite. Even major players, such as the Las Vegas Sands, have reportedly delayed projects. Packer's fortunes have certainly fallen in line with the global crisis, with BRW magazine this week estimating his worth at $3 billion, down from $6.1 billion this time last year and the $7.3 billion he reportedly inherited from his father.
Still, Crown shares, of which the Packer family owns 36 per cent, have rallied strongly ahead of the City of Dreams opening. The run was spurred in part by Crown's escape from a proposed $US1.75 billion ($2.2 billion) takeover of Cannery Casino Resorts in the US. But one source close to Packer describes him as "quietly confident" about the future of City of Dreams. "I think we benefited from the fact there are a hell of a lot of cranes up there on unfinished projects," he says. "It is the only big new casino opening, and it will be the only one for some time."
The importance of Monday night's spectacular opening ceremony and first few months of trading are not lost on Melco Crown finance chief Simon Dewhurst. "City of Dreams is our flagship development," he says.
"It has consumed over 60 per cent of our investment capital and it represents our first opportunity in Macau to compete for the integrated resort middle ground that represents the future for the market. The opening of CoD marks the culmination of more than six years hard work. We are taking a transformational step from being primarily a development company, to being primarily an operating company."
Crown chief Rowen Craigie agrees the opening of City of Dreams represents "a major milestone". He says: "City of Dreams will be an exciting and attractive property and will benefit from being the only major casino entertainment complex to open in Macau in 2009."
City of Dreams, on Macau's popular Cotai strip, will be Melco Crown's second in the territory, following the opening of the $US760 million Crown Macau (now the Altira Macau) in 2007.
Analysts say City of Dreams is the first casino in Macau to break the $US2billion investment threshold. Its opening will be the culmination of a process that started before Kerry Packer's death when James settled on Macau as the first focal point of his global gaming ambitions.
In November 2004, Packer struck a joint venture agreement with the Hong Kong-listed leisure and entertainment group, Melco Development, run by Lawrence Ho. While there was little concrete announced at the time, it was soon made clear the joint venture company had big plans.
Once his father died in December 2005, Packer moved quickly to transform what was then the media-driven Publishing and Broadcasting Limited into a gaming empire. This transformation was highlighted late in 2006 with the top-of-the-market sale of PBL Media -- owner of the Nine Network and ACP Magazines -- to private equity firm CVC Asia Pacific for more than $5billion, just before the value of the assets started to decline amid both structural and cyclical change.
The PBL empire was left as largely a casino-focused one, and a subsequent split of the group in 2007 saw the casino assets hived off into the new casinos group, Crown.
But the move that signalled Packer's serious intent for gaming in Macau was his joint move with Melco just three months after his father's death to buy Macau's last available casino sub-concession from Wynn, the US casino entrepreneur, for $US900 million. The move cemented Packer and Ho as major players at the table of Macau's casino industry.
Altira Macau and City of Dreams are now held through Melco Crown Entertainment, which is listed on the Nasdaq index in the US and counts Crown as a 36.4 per cent shareholder.
Since 2006, Crown has also made a series of casino purchases independent of the Melco Crown venture in North America. These include stakes in the US-based Fontainebleau Resorts, Canada's Gateway Resorts group, Stations Casino Group and Harrah's Entertainment, underlining Packer's intense focus on gaming assets.
With the fall-off in casino values worldwide since the purchases, critics -- acting with the benefit of 20/20 hindsight -- have questioned the wisdom of his moves in both Macau and North America shortly before the global economic downturn. Even Crown's Rowen Craigie reportedly admitted earlier this year that the group had bought some of its US assets at the top of the market.
Crown's woes in the US were on full display in the company's interim profit result, with the group posting a reported net loss of $409.7 million due to a non-recurring $454.9 million writedown to the value of its minority US casino investments -- namely Fontainebleau, Stations and Harrah's.
But Packer's supporters assert that while there has been a fall in value of the US ventures in particular, he is well up on his Macau investments. After its $US45 million investment in Melco Crown's $US180 million capital raising this month, Crown has now invested a total of $US500 million in the group. That stake is now worth more than $US1 billion. Friends point out that Packer has effectively doubled his money and, in the process, gained a major say in a business that has two casinos fully funded, one of only six casino licences in Macau, and assorted hotels, retail complexes and entertainment venues supporting the casinos.
Melco Crown is not without problems. It booked a March quarter net loss of $US35.3 million, compared to a profit of $US43.2 million for the same period last year, prompting Ho to admit the casino market was not out of the woods yet. One analyst noted that Crown Macau had a "very poor opening" in 2007, with Packer's reputation suffering as a result. City of Dreams, he says, represents "a very critical moment".
Then again, Deutsche Bank last week raised its price target on Melco Crown from $US4.40 to $US6 a share, saying it was "now more confident on the success of City of Dreams after we walked through the property early this month".
City of Dreams certainly sounds impressive. Ho promises the water- and fantasy-themed complex will be a "next-generation resort like no other in Asia, or perhaps the world".
Located directly opposite the biggest casino in Macau -- the Las Vegas Sands Venetian Macau -- it will boast several distinctly branded casino floors, three world-class hotels and a shopping precinct to be known as The Boulevard.
On Monday, Melco Crown opens the first phase of that project, which will include the Crown Towers and Hard Rock hotels, 20 bars and restaurants, The Boulevard, plus a casino with 520 gaming tables (a third of which will be VIP) and 1350 gaming machines. It will be the only major casino to open in Macau this calendar year.
The casino's Bubble Theatre will feature a 10-minute "Dragon's Treasure" multi-media lights show. Theatre of Dreams, a 2000-seat theatre, will feature a Cirque Du Soleil-style water production when it opens in the December half. By December, the third hotel, the Grand Hyatt, will open, giving the complex a total of 1400 rooms. And there is even the future prospect of a further apartment development in the complex, subject to Macau regulatory approval. Melco's Dewhurst says Melco Crown is "very confident". He says: "We have spent a very significant amount of time, energy and resource into understanding what's working and what's not working throughout the market. We think City of Dreams is right."
Success for Melco Crown and City of Dreams will come down to a number of things. But one key measure will be foot traffic. "We expect that we will have something in the order of 35,000 guests a day passing through the property," Dewhurst says. "I have no doubt that we will have in excess of that number on the first day. In the first 100 days what's important for us is that on any of those 100 days we see that volume of traffic into the building."
In the current climate, that could be a challenge. Its performance will hinge on the recovery of the Asian economy -- and in particular how quickly Asian high-rollers return to the territory's casinos after the tough recent times.
Credit Suisse analyst Gabriel Chan said in a note last week that "with concerns about swine flu remaining vital, and signs that the recovery pace of the Chinese economy may have slowed, we see certain execution risks for the opening".
Indeed, visitor numbers to Macau, as recorded by the Statistics and Census Service, were down 3.5 per cent in April from the same period last year and steady over the previous month. Visitors from mainland China were down 13.5 per cent year on year.
Gaming revenues have suffered as a result of weaker visitor arrivals, but the pace of the decline has stabilised in the past few months. And there are hopes, from Ho down, for a swift rebound, partly driven by the buzz from the City of Dreams opening.
Some analysts believe that as Macau's most expensive casino, City of Dreams may be able to take market share from other players.
Janet Brashear, senior gaming analyst with US investment house Sanford C. Bernstein, says she expects City of Dreams to "make a splash, garnering $US1.4 billion in gross gaming revenues in 2010 and a 10 per cent share of the market". She also predicts City of Dreams could cannibalise the market share of some of its competitors in Macau, such as the Venetian Macau and Wynn resort.
For analysts, success will come down to one thing -- City of Dreams achieving an earnings before interest, tax, depreciation and amortisation of about $US300 million in the first year.
"You look across the road at the Venetian and they're doing about $US120 million EBITDA a quarter -- $US500 million a year," says one analyst. "So you would have thought $US300 million would be achievable for City of Dreams."
If City of Dreams achieves better than that -- say $US500 million a year -- then it will be a strong position against its rivals. There is growing speculation that casino giant MGM may have to sell its Macau interests after US regulators raised concerns about its local joint venture partner, Pansy Ho -- the daughter of Stanley and brother of Lawrence. Las Vegas Sands is also looking to sell some plots.
One close Packer confidant is hedging his bets ahead of Monday's event. He says: "On the assumption that the Macau economy will start to improve, Melco and City of Dreams are going to be in a very good place." (The Australian)
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James Packer's biggest casino venture opens in Macau today - The Daily Telegraph - 1st June 2009
It is arguably James Packer's biggest and boldest venture, a key pillar in the man's grand plan of global gaming dominance. And it opens today.
It is the much-hyped City of Dreams, a colossal casino resort on Macau's glitzy Cotai Strip and the second instalment from Melco Crown (MPEL), the company jointly owned by Packer's Crown Limited, and Melco.
There is no disputing the fanfare with which the grandiose complex will open, but what is a hot topic is whether the venture will be a success.
The timing, amid a global meltdown and hampered by a forced slowdown of tourists entering Macau, is not helpful.
But it does have one key advantage. It is the only casino opening in Macau this year, after much-larger projects were postponed.
One gaming analyst told The Daily Telegraph the City of Dreams "was a sink or swim moment" for MPEL.
But UBS analysts believes product offering, and most surprisingly timing, will make City of Dreams a success.
"Against the context of limited supply growth, improving market revenue trends, and City of Dream's scale and product, MPEL is arguably in the right place at the right time," the analysts said in a report.
Melco Crown suffered an inglorious start to life in Macau with Crown Macau failing to attract the punters due to its location and public perceptions that the complex had Feng Shui design issues.
Recently reborn as Altira Macau, the complex has since flourished thanks to the significant revenue generated by VIP gamblers ferried in from Hong Kong.
MPEL does hold a licence to build a third casino complex in Macau, but has not committed to plans as yet. (Credit: The Daily Telegraph)
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It is the much-hyped City of Dreams, a colossal casino resort on Macau's glitzy Cotai Strip and the second instalment from Melco Crown (MPEL), the company jointly owned by Packer's Crown Limited, and Melco.
There is no disputing the fanfare with which the grandiose complex will open, but what is a hot topic is whether the venture will be a success.
The timing, amid a global meltdown and hampered by a forced slowdown of tourists entering Macau, is not helpful.
But it does have one key advantage. It is the only casino opening in Macau this year, after much-larger projects were postponed.
One gaming analyst told The Daily Telegraph the City of Dreams "was a sink or swim moment" for MPEL.
But UBS analysts believes product offering, and most surprisingly timing, will make City of Dreams a success.
"Against the context of limited supply growth, improving market revenue trends, and City of Dream's scale and product, MPEL is arguably in the right place at the right time," the analysts said in a report.
Melco Crown suffered an inglorious start to life in Macau with Crown Macau failing to attract the punters due to its location and public perceptions that the complex had Feng Shui design issues.
Recently reborn as Altira Macau, the complex has since flourished thanks to the significant revenue generated by VIP gamblers ferried in from Hong Kong.
MPEL does hold a licence to build a third casino complex in Macau, but has not committed to plans as yet. (Credit: The Daily Telegraph)
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Wednesday, May 27, 2009
Vic govt denies favours for Crown casino, by Katie Bradford - Fairfax - 27th May 2009
The Victorian government denies giving special favours to Crown casino but admits it has a close working relationship.
Two weeks after announcing it was allowing Crown to expand its gaming floor in return for increased poker machine tax, Tourism Minister Tim Holding defended the government's relationship with the casino while promoting its new hotel on Monday.
"We work closely with Crown but there's no deal in relation to this development," Mr Holding told reporters.
"Whether you're coming to dine in the magnificent restaurant, whether you want to stay in the fantastic hotel, whether you're wanting to gamble in the casino ... whatever you want to do here on site there are fantastic opportunities to do so.
"The government is very pleased that Crown is so confident in the tourism industry of Victoria that it has decided to build Australia's biggest hotel."
Anti-gambling campaigners accused the government of having a "cosy" relationship with Crown after permitting it to expand its gaming area by a further 150 tables.
In exchange, Crown's tax rate on its poker machines will progressively increase by 10 per cent to 32.5 per cent by 2014/15 - only then matching what other gaming venues already pay.
"We actually use this as an example of how Crown is being treated the same as other venues across Victoria," Mr Holding said.
Crown Melbourne's chief executive David Courtney refused to comment on his relationship with the government, or the tax deal.
"We're really here today to talk about the new hotel, it's a significant investment," he told reporters.
Under repeated questioning, Mr Courtney said it had been 10 years since Crown had been allowed to expand its gaming operations.
"It's very important to allow us to beat international competitors."
He refused to answer questions on whether the casino had a "sweetheart relationship" with the state government.
But Mr Courtney admitted the expansion would attract more high rollers.
Victorian opposition leader Ted Baillieu said the relationship between the government and the venue was "obviously very close".
He demanded the government answer further questions about the extra tables deal, including who initiated it and what the exact conditions were.
"Clearly, until these questions are being answered by the government, it ought to be very cautious about the relationship."
Mr Baillieu said Mr Holding would do "anything he believes was in his own interests".
"But that's the way this government operates, this is a government of political patronage, this is the government that's searching for favours all over the place but it's lost touch with the community, it's lost touch with reality and has no credibility on integrity, on corruption and on good governance." (Credit: Fairfax)
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Two weeks after announcing it was allowing Crown to expand its gaming floor in return for increased poker machine tax, Tourism Minister Tim Holding defended the government's relationship with the casino while promoting its new hotel on Monday.
"We work closely with Crown but there's no deal in relation to this development," Mr Holding told reporters.
"Whether you're coming to dine in the magnificent restaurant, whether you want to stay in the fantastic hotel, whether you're wanting to gamble in the casino ... whatever you want to do here on site there are fantastic opportunities to do so.
"The government is very pleased that Crown is so confident in the tourism industry of Victoria that it has decided to build Australia's biggest hotel."
Anti-gambling campaigners accused the government of having a "cosy" relationship with Crown after permitting it to expand its gaming area by a further 150 tables.
In exchange, Crown's tax rate on its poker machines will progressively increase by 10 per cent to 32.5 per cent by 2014/15 - only then matching what other gaming venues already pay.
"We actually use this as an example of how Crown is being treated the same as other venues across Victoria," Mr Holding said.
Crown Melbourne's chief executive David Courtney refused to comment on his relationship with the government, or the tax deal.
"We're really here today to talk about the new hotel, it's a significant investment," he told reporters.
Under repeated questioning, Mr Courtney said it had been 10 years since Crown had been allowed to expand its gaming operations.
"It's very important to allow us to beat international competitors."
He refused to answer questions on whether the casino had a "sweetheart relationship" with the state government.
But Mr Courtney admitted the expansion would attract more high rollers.
Victorian opposition leader Ted Baillieu said the relationship between the government and the venue was "obviously very close".
He demanded the government answer further questions about the extra tables deal, including who initiated it and what the exact conditions were.
"Clearly, until these questions are being answered by the government, it ought to be very cautious about the relationship."
Mr Baillieu said Mr Holding would do "anything he believes was in his own interests".
"But that's the way this government operates, this is a government of political patronage, this is the government that's searching for favours all over the place but it's lost touch with the community, it's lost touch with reality and has no credibility on integrity, on corruption and on good governance." (Credit: Fairfax)
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Sunday, May 24, 2009
Global downturn hammers James Packer's gambling ambitions, by Eli Greenblat - The Age - 22nd May 2009
James Packer's growing casino operation in Macau is the latest victim of the global downturn.
Dwindling patronage at Crown's Macau joint venture, which posted a $US35.3 million ($A45.6 million) first-quarter loss on a 55 per cent revenue slump, is challenging his push into the region.
Melco Crown Entertainment, which operates the Altira Macau casino and is building the $US2 billion City of Dreams casino, reported overnight that in the first quarter of this year revenue fell to $US216.5 million, down from $US482.9 million in the previous corresponding period.
Revenue from its maiden Altira development dropped 60 per cent in the period.
Although Melco Crown Entertainment's adjusted pre-tax and depreciation earnings were significantly weaker, they remained in the black at $US21.3 million. But the bottom line was deep in the red and showed a $US35.3 million loss against a $US43.2 million profit previously.
The souring performance reflects the depressed state of major casino and gambling businesses in Asia and the US, forcing companies to slash the value of their assets in the face of a drop in consumer spending on gambling and entertainment.
For Mr Packer, it is a further blow to his ambitions in the region as he tries to broaden Crown's earnings base away from Australia — where the company owns Melbourne's Crown Casino and Burswood Casino in Perth — to the Asian region and North America. In 2006, soon after the death of his father, Kerry, James Packer forged a $US8.7 billion venture with Lawrence Ho's Melco casino group to create Melco Crown Entertainment. Mr Ho is the son of Macau gambling kingpin Stanley Ho.
Crown, then called Publishing and Broadcasting Ltd, took a post-listing 41.4 per cent equity share in the joint venture that was valued at $A4.73 billion when Melco Crown Entertainment stock began trading on Nasdaq and closed its first day at $US21.55.
Since then, Crown's stake in the joint venture has been diluted to 36.4 per cent while Melco Crown Entertainment shares have fallen to $US5.85.
At Crown's half-year financial report, chief executive Rowen Craigie said its share of Melco Crown Entertainment's normalised result for the half was an $A11.3 million loss. The venture's Altira Macau casino recorded $US183.6 million net revenue for the March quarter versus $US459.9 million for the same quarter last year.
Constellation Capital Management investment analyst Peter Chilton said yesterday the Macau casino market was having earnings problems similar to those of Las Vegas.
"It probably is under some pressure with a lot of new capacity and at the same time the actual business available has slowed down, because of the downturn in China," he said. "And we have seen it in the United States as well, where people are less willing to, and have less funds available, to put into casinos.
"Las Vegas is suffering as well. I think maybe people had thought of casinos as fairly recession-type-proof businesses but there is obviously a limit in a serious downturn — people do visit these establishments less, or spend less money."
Melco Crown Entertainment co-chairman and chief executive Mr Ho said City of Dreams was scheduled to open on June 1, and the budget was unchanged.
"Our financial position remains strong and our balance sheet is one of the best in the gaming industry," he said. "We held approximately $US755 million of cash, excluding cage cash, at the end of the first quarter, and we expect to spend approximately $US244 million on construction and pre-opening preparations at City of Dreams from the start of the current quarter through its opening."
Crown shares fell 2¢ to $6.97.
http://www.melco-crown.com
(Credit: The Age)
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Dwindling patronage at Crown's Macau joint venture, which posted a $US35.3 million ($A45.6 million) first-quarter loss on a 55 per cent revenue slump, is challenging his push into the region.
Melco Crown Entertainment, which operates the Altira Macau casino and is building the $US2 billion City of Dreams casino, reported overnight that in the first quarter of this year revenue fell to $US216.5 million, down from $US482.9 million in the previous corresponding period.
Revenue from its maiden Altira development dropped 60 per cent in the period.
Although Melco Crown Entertainment's adjusted pre-tax and depreciation earnings were significantly weaker, they remained in the black at $US21.3 million. But the bottom line was deep in the red and showed a $US35.3 million loss against a $US43.2 million profit previously.
The souring performance reflects the depressed state of major casino and gambling businesses in Asia and the US, forcing companies to slash the value of their assets in the face of a drop in consumer spending on gambling and entertainment.
For Mr Packer, it is a further blow to his ambitions in the region as he tries to broaden Crown's earnings base away from Australia — where the company owns Melbourne's Crown Casino and Burswood Casino in Perth — to the Asian region and North America. In 2006, soon after the death of his father, Kerry, James Packer forged a $US8.7 billion venture with Lawrence Ho's Melco casino group to create Melco Crown Entertainment. Mr Ho is the son of Macau gambling kingpin Stanley Ho.
Crown, then called Publishing and Broadcasting Ltd, took a post-listing 41.4 per cent equity share in the joint venture that was valued at $A4.73 billion when Melco Crown Entertainment stock began trading on Nasdaq and closed its first day at $US21.55.
Since then, Crown's stake in the joint venture has been diluted to 36.4 per cent while Melco Crown Entertainment shares have fallen to $US5.85.
At Crown's half-year financial report, chief executive Rowen Craigie said its share of Melco Crown Entertainment's normalised result for the half was an $A11.3 million loss. The venture's Altira Macau casino recorded $US183.6 million net revenue for the March quarter versus $US459.9 million for the same quarter last year.
Constellation Capital Management investment analyst Peter Chilton said yesterday the Macau casino market was having earnings problems similar to those of Las Vegas.
"It probably is under some pressure with a lot of new capacity and at the same time the actual business available has slowed down, because of the downturn in China," he said. "And we have seen it in the United States as well, where people are less willing to, and have less funds available, to put into casinos.
"Las Vegas is suffering as well. I think maybe people had thought of casinos as fairly recession-type-proof businesses but there is obviously a limit in a serious downturn — people do visit these establishments less, or spend less money."
Melco Crown Entertainment co-chairman and chief executive Mr Ho said City of Dreams was scheduled to open on June 1, and the budget was unchanged.
"Our financial position remains strong and our balance sheet is one of the best in the gaming industry," he said. "We held approximately $US755 million of cash, excluding cage cash, at the end of the first quarter, and we expect to spend approximately $US244 million on construction and pre-opening preparations at City of Dreams from the start of the current quarter through its opening."
Crown shares fell 2¢ to $6.97.
http://www.melco-crown.com
(Credit: The Age)
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Friday, May 22, 2009
Sunday, May 17, 2009
Branson plans launch of Virgin internet bank, by Richard Wachman - The Observer - 17th May 2009
Richard Branson is to launch an internet bank in a move designed to exploit public disgust with Britain's big banks in the wake of the credit crunch.
Branson follows Tesco, which is also planning to capitalise on disenchantment with traditional banking via a big push into financial services.
The entrepreneur will act through his Virgin Money subsidiary, which is headed by Jayne-Anne Gadhia, a former boss of RBS's mortgage division and marketing director of Norwich Union.
Virgin Money is understood to be poised to apply for a banking licence from the Financial Services Authority to allow it to take deposits and offer mortgages for the first time. Branson is talking to US investment banks and other investors about financial backing.
He is also talking with advisers about more ambitious plans that could see Virgin launch a bid for Northern Rock, if the government decides to sell part of the bank back to the private sector before the general election in May 2010.
Credit Suisse, the Treasury's financial adviser, is thought to have sounded out potential buyers in recent weeks. Virgin Money failed in an earlier bid to acquire Northern Rock, which was nationalised by the government in early 2008.
Virgin is looking at three options: launching a new bank, complete with a branch network; entering a partnership with another financial player; or buying a stricken bank, such as Northern Rock, as part of a larger consortium.
Virgin Money is shortly to announce that sales leapt from £70m to around £100m in 2008. Profits are estimated to come in at £30m.
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Branson follows Tesco, which is also planning to capitalise on disenchantment with traditional banking via a big push into financial services.
The entrepreneur will act through his Virgin Money subsidiary, which is headed by Jayne-Anne Gadhia, a former boss of RBS's mortgage division and marketing director of Norwich Union.
Virgin Money is understood to be poised to apply for a banking licence from the Financial Services Authority to allow it to take deposits and offer mortgages for the first time. Branson is talking to US investment banks and other investors about financial backing.
He is also talking with advisers about more ambitious plans that could see Virgin launch a bid for Northern Rock, if the government decides to sell part of the bank back to the private sector before the general election in May 2010.
Credit Suisse, the Treasury's financial adviser, is thought to have sounded out potential buyers in recent weeks. Virgin Money failed in an earlier bid to acquire Northern Rock, which was nationalised by the government in early 2008.
Virgin is looking at three options: launching a new bank, complete with a branch network; entering a partnership with another financial player; or buying a stricken bank, such as Northern Rock, as part of a larger consortium.
Virgin Money is shortly to announce that sales leapt from £70m to around £100m in 2008. Profits are estimated to come in at £30m.
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Saturday, May 16, 2009
Second high-roller deal for Crown casino, by Michael Warner - Herald Sun - 16th May 2009
EXCLUSIVE: CROWN casino has hit the jackpot for the second time this week.
The state's gambling watchdog revealed it had given preliminary approval for Crown to expand its rich high-roller Mahogany Room.
It comes just days after Premier John Brumby announced the casino would be granted an extra 150 gaming tables in a sweetheart deal with its billionaire owner, James Packer.
The Mahogany Room expansion will see a new VIP facility built above the Crown Towers driveway at the casino's eastern end.
High-stakes roulette, blackjack and baccarat tables will cater for bets of up to $280,000.
And smoking will also be permitted under special international exemptions, despite the vast majority of patrons hailing from Victoria.
"We've told them (Crown) that, based on how they've described it to us, we see no impediment to it proceeding," Victorian Commission for Gambling Regulation chief Peter Cohen said.
"They've sought some boundary changes to the room."
Mr Cohen revealed sections of the casino's public gaming floors were also set to increase.
But a spokeswoman for Gaming Minister Tony Robinson said last night the two rulings were unrelated.
"I've just had a few more discussions, and my understanding is that all of this is at very preliminary stages between Crown and the VCGR. And so at this point, the minister has not been formally advised of any expansion of the Mahogany Room," Rebecca Harrison said.
Mr Brumby revealed on Tuesday - just hours before the handing down of the federal Budget - that he had handed Crown 150 new tables in exchange for higher tax on the casino's poker machines.
He defended the timing of the announcement and rejected criticism that he had tried to hide the deal.
But sources suggested the agreement was signed more than 10 days ago, and its announcement delayed until Budget day.
Mr Brumby admitted to private discussions with Mr Packer at a taxpayer-funded suite at the Albert Park Grand Prix six weeks ago.
He initially refused to detail the discussions, claiming they were private, but has since said they talked about Tiger Woods' visit to Melbourne in November and not the lucrative casino deal.
Mr Packer described the talks as "casual" and unrelated to the arrangement. (Credit: Herald Sun)
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The state's gambling watchdog revealed it had given preliminary approval for Crown to expand its rich high-roller Mahogany Room.
It comes just days after Premier John Brumby announced the casino would be granted an extra 150 gaming tables in a sweetheart deal with its billionaire owner, James Packer.
The Mahogany Room expansion will see a new VIP facility built above the Crown Towers driveway at the casino's eastern end.
High-stakes roulette, blackjack and baccarat tables will cater for bets of up to $280,000.
And smoking will also be permitted under special international exemptions, despite the vast majority of patrons hailing from Victoria.
"We've told them (Crown) that, based on how they've described it to us, we see no impediment to it proceeding," Victorian Commission for Gambling Regulation chief Peter Cohen said.
"They've sought some boundary changes to the room."
Mr Cohen revealed sections of the casino's public gaming floors were also set to increase.
But a spokeswoman for Gaming Minister Tony Robinson said last night the two rulings were unrelated.
"I've just had a few more discussions, and my understanding is that all of this is at very preliminary stages between Crown and the VCGR. And so at this point, the minister has not been formally advised of any expansion of the Mahogany Room," Rebecca Harrison said.
Mr Brumby revealed on Tuesday - just hours before the handing down of the federal Budget - that he had handed Crown 150 new tables in exchange for higher tax on the casino's poker machines.
He defended the timing of the announcement and rejected criticism that he had tried to hide the deal.
But sources suggested the agreement was signed more than 10 days ago, and its announcement delayed until Budget day.
Mr Brumby admitted to private discussions with Mr Packer at a taxpayer-funded suite at the Albert Park Grand Prix six weeks ago.
He initially refused to detail the discussions, claiming they were private, but has since said they talked about Tiger Woods' visit to Melbourne in November and not the lucrative casino deal.
Mr Packer described the talks as "casual" and unrelated to the arrangement. (Credit: Herald Sun)
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Friday, May 15, 2009
Property News Media Blog: Do you support casino expansions? Tourism, entertainment industry and employment elements
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Do you support casino expansions? Tourism, entertainment industry and employment elements
Homeless now charged to stay at homeless shelters - 11th May 2009
In these dire times, even the homeless are now being charged to stay at homeless shelters.
That's the situation in New York City where city officials this month began charging rent to working families staying in public homeless shelters.
The policy stems from a 1997 state law that hasn't been enforced until now. Under that law, shelter managers started to require families to pay a portion of their income, depending on the shelter and family size, according to The New York Times newspapers.
Residents could be expected to pay up to half their earnings.
Some shelter residents say the new rule will ruin their chances of saving enough money to get an apartment.
One single mother living in a Manhattan shelter tells the newspaper she got a letter saying she had to give up $336 ($A440) of the $800 ($A1050) she makes each month as a cashier.
Vanessa Dacosta makes $8.40 ($A11) an hour. She got a letter under her door at the shelter a few weeks ago saying she'd have to fork up nearly half of what she was bringing in.
For Dacosta, who pays nearly $100 ($A131) a week on child care for her 2-year-old, paying the shelter is hardly an expense she can afford.
“It’s not right,” Dacosta told the Times. “I pay my baby sitter, I buy diapers, and I’m trying to save money so I can get out of here. I don’t want to be in the shelter forever.”
But the city says it's got to find a way to cover the costs of state housing aid.
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That's the situation in New York City where city officials this month began charging rent to working families staying in public homeless shelters.
The policy stems from a 1997 state law that hasn't been enforced until now. Under that law, shelter managers started to require families to pay a portion of their income, depending on the shelter and family size, according to The New York Times newspapers.
Residents could be expected to pay up to half their earnings.
Some shelter residents say the new rule will ruin their chances of saving enough money to get an apartment.
One single mother living in a Manhattan shelter tells the newspaper she got a letter saying she had to give up $336 ($A440) of the $800 ($A1050) she makes each month as a cashier.
Vanessa Dacosta makes $8.40 ($A11) an hour. She got a letter under her door at the shelter a few weeks ago saying she'd have to fork up nearly half of what she was bringing in.
For Dacosta, who pays nearly $100 ($A131) a week on child care for her 2-year-old, paying the shelter is hardly an expense she can afford.
“It’s not right,” Dacosta told the Times. “I pay my baby sitter, I buy diapers, and I’m trying to save money so I can get out of here. I don’t want to be in the shelter forever.”
But the city says it's got to find a way to cover the costs of state housing aid.
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Crisis hits millionaires' row, by Chris Zappone - The Sydney Morning Herald - 15th May 2009
Australia has fewer million-dollar suburbs as the global financial crisis erodes home values, according to a report.
How did your suburb fare? Click here for the list.
The total number of suburbs where the median home price is $1 million or more fell to 134 in the year to the end of February, from 152 a year ago, according to real estate research agency RP Data, with median home prices plunging more than 20 per cent in the some suburbs.
"The top end of the market has always been seen as a bit of safe haven and has generally been immune to downturn,'' said RP Data senior research analyst Cameron Kusher, but the global financial crisis has "really impacted hard on high income earners'' resulting in the need to sell properties.
"Even through past recessions it's very rare to see these areas drop more than 20 per cent,'' Mr Kusher said.
"It is something new and something that hasn't been seen before.'' Four suburbs in Western Australia showed the average median price falling more then 20 per cent, based on monthly sales data.
New South Wales saw the largest fall in the number of million-dollar suburbs, losing eight in the year to February.
The suburb of Warrawee experienced the biggest plunge, with the median home price of $1.09 million in 2008, slumping to $895,000 in 2009.
Overall, the number of million-dollar NSW suburbs fell to 78 in 2009 from 86 in 2008, the report said.
The impact of the financial crisis, which accelerated late last year, has been driving the sales of top-end homes, Mr Kusher said.
Good times gone
Some high income-earners ''probably thought the good times would continue for a lot longer than they have,'' he said.
''They have missed out on bonuses, their share portfolios are worth half of what they were 18 months ago,'' Mr Kusher said. ''Some people have had to sell their properties.''
''Given the state of the economy, there are not a lot of people in a position to spend more than $1 million at the moment.''
Western Australia, where the economy is tied to the price and outlook of resources, saw the most rapid shrinkage of million-dollar neighbourhoods in percentage terms. The number of suburbs where the median home price was $1 million or more dropped 21 per cent, from 29 in 2008 to 23 in 2009.
The Perth suburb of Ardross led the price falls, with the median price tumbling 26.4 per cent in the year to February.
Five of Victoria's million-plus-neighbourhoods slipped under the threshold, bringing the total to 20 in 2009, a 20 per cent fall.
South Yarra lost the most, dropping 18.1 per cent, to $900,000 in 2009 from $1.1 in the twelve months to February 2008.
Queensland and South Australia both gained one-million-dollar-plus suburbs each in the year.
US price plunge
A plunge in US home prices linked to subprime loans set off the global financial crisis last year, igniting fears that drops of 20 per cent the US and UK could eventually hit Australia.
Official home prices have fallen 6.7 per cent in the year to March according to Australian Bureau of Statistics data, although unofficial measures show more resilience.
''This decline in prices, the largest since the Great Depression, comes in spite of the fact that subprime lending comprised only a tiny part of the local market while Australia never saw the overbuilding that occurred in other countries,'' wrote RBS economists Kieran Davies and Felicity Emmett in a note to clients.
''With this downward momentum now in place, as well as the prospect of a further large rise in unemployment, house prices could potentially fall further over coming months.''
The Federal Government extended the deadline for the full First Home Owners grant boost until the end of December, and in a reduced from till the end of 2009.
Economists link the resilience in sub-$500,000 home prices with the grant boost.
JP Morgan analyst Helen Kevans flagged the hazards of high risk borrowers entering the housing market ahead of an expected rise in the unemployment.
By government estimates, the jobless rate will rise to 8.25 per cent by the middle of 2010. The rate currently stands at 5.4 per cent. (Credit: The Sydney Morning Herald)
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How did your suburb fare? Click here for the list.
The total number of suburbs where the median home price is $1 million or more fell to 134 in the year to the end of February, from 152 a year ago, according to real estate research agency RP Data, with median home prices plunging more than 20 per cent in the some suburbs.
"The top end of the market has always been seen as a bit of safe haven and has generally been immune to downturn,'' said RP Data senior research analyst Cameron Kusher, but the global financial crisis has "really impacted hard on high income earners'' resulting in the need to sell properties.
"Even through past recessions it's very rare to see these areas drop more than 20 per cent,'' Mr Kusher said.
"It is something new and something that hasn't been seen before.'' Four suburbs in Western Australia showed the average median price falling more then 20 per cent, based on monthly sales data.
New South Wales saw the largest fall in the number of million-dollar suburbs, losing eight in the year to February.
The suburb of Warrawee experienced the biggest plunge, with the median home price of $1.09 million in 2008, slumping to $895,000 in 2009.
Overall, the number of million-dollar NSW suburbs fell to 78 in 2009 from 86 in 2008, the report said.
The impact of the financial crisis, which accelerated late last year, has been driving the sales of top-end homes, Mr Kusher said.
Good times gone
Some high income-earners ''probably thought the good times would continue for a lot longer than they have,'' he said.
''They have missed out on bonuses, their share portfolios are worth half of what they were 18 months ago,'' Mr Kusher said. ''Some people have had to sell their properties.''
''Given the state of the economy, there are not a lot of people in a position to spend more than $1 million at the moment.''
Western Australia, where the economy is tied to the price and outlook of resources, saw the most rapid shrinkage of million-dollar neighbourhoods in percentage terms. The number of suburbs where the median home price was $1 million or more dropped 21 per cent, from 29 in 2008 to 23 in 2009.
The Perth suburb of Ardross led the price falls, with the median price tumbling 26.4 per cent in the year to February.
Five of Victoria's million-plus-neighbourhoods slipped under the threshold, bringing the total to 20 in 2009, a 20 per cent fall.
South Yarra lost the most, dropping 18.1 per cent, to $900,000 in 2009 from $1.1 in the twelve months to February 2008.
Queensland and South Australia both gained one-million-dollar-plus suburbs each in the year.
US price plunge
A plunge in US home prices linked to subprime loans set off the global financial crisis last year, igniting fears that drops of 20 per cent the US and UK could eventually hit Australia.
Official home prices have fallen 6.7 per cent in the year to March according to Australian Bureau of Statistics data, although unofficial measures show more resilience.
''This decline in prices, the largest since the Great Depression, comes in spite of the fact that subprime lending comprised only a tiny part of the local market while Australia never saw the overbuilding that occurred in other countries,'' wrote RBS economists Kieran Davies and Felicity Emmett in a note to clients.
''With this downward momentum now in place, as well as the prospect of a further large rise in unemployment, house prices could potentially fall further over coming months.''
The Federal Government extended the deadline for the full First Home Owners grant boost until the end of December, and in a reduced from till the end of 2009.
Economists link the resilience in sub-$500,000 home prices with the grant boost.
JP Morgan analyst Helen Kevans flagged the hazards of high risk borrowers entering the housing market ahead of an expected rise in the unemployment.
By government estimates, the jobless rate will rise to 8.25 per cent by the middle of 2010. The rate currently stands at 5.4 per cent. (Credit: The Sydney Morning Herald)
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Thursday, May 14, 2009
Packer rebounds as Australia's richest, by Trevor Chappell - The Sydney Morning Herald - 14th May 2009
Gambling tycoon James Packer is Australia's richest man after a slump in the resources sector eroded the fortune of the previous wealth leader, iron-ore magnate Andrew Forrest.
Forbes Asia magazine's 2009 list of rich Australians shows Mr Packer, 41, took back the top mantle from third position.
But his estimated wealth fell to $US3.1 billion ($A4.12 billion), from $US5.3 billion in 2008, following a drop in the share prices of his casinos and media interests.
Mr Packer's interests in Australia include the Crown casino in Melbourne and the Burswood casino in Perth.
Mr Forrest, the boss of Fortescue Metals Group Ltd, crashed to fifth, after his fortune shrank to $US1.65 billion ($A2.19 billion), from almost $US5 billion, as waning China demand for iron ore caused Fortescue's shares to drop by two-thirds.
Second on the list was shopping centre developer Frank Lowy, whose wealth decreased to $US2.8 billion ($A3.72 billion), from $US4.4 billion.
Harry Triguboff, head of Australia's biggest builder of apartments, Meriton, was third with $US2 billion ($A2.66 billion), down from $US2.7 billion.
Forbes Asia said that overall, Australia's billionaires and millionaires were less wealthy than they were 12 months ago, when the global financial crisis began to bite.
The number of billionaires among Australia's 40 richest business people contracted from 16 to nine.
However, three increased their wealth.
The head of hedge fund group CQS, Michael Hintze, had $US150 million ($A199.15 million) more to roll in and was in 12th position with $US900 million ($A1.19 billion).
At number 14 was Macarthur Coal founder Ken Talbot, whose fortune grew to $US750 million ($A995.75 million), from $US620 million.
Property tycoon Maurice Alter's wealth grew by $US20 million ($A26.55 million), to $US590 million ($A783.32 million).
Forbes Asia said Australia's tycoons were also getting older, with 16 on the list of 40 aged 70 years or more.
Packaging magnate Richard Pratt, who died in April from cancer aged 78, was replaced on the rich list by his son Anthony.
Anthony Pratt, who now heads Visy Industries, was in sixth spot, with a net worth of $US1.6 billion ($A2.12 billion).
Other newcomers to the list were Reece Australia chairman Leslie Alan Wilson at 28th with $US445 million ($A590.81 million), and gaming magnate Bruce Mathieson at 36th with $US350 million ($A464.68 million).
Mining heiress Gina Rinehart remained Australia's richest woman and seventh overall with $US1.5 billion ($A1.99 billion), down from $US2.4 billion in 2008.
Forbes Asia said that for the first time since it began compiling the annual list, a New Zealander was richer than the wealthiest Australian.
Kiwi Graeme Hart's mountain of money is estimated at $US4.7 billion ($A6.24 billion), well above Mr Packer.
Mr Hart made his fortune in the paper and packaging sector. (Credit: The Sydney Morning Herald)
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Forbes Asia magazine's 2009 list of rich Australians shows Mr Packer, 41, took back the top mantle from third position.
But his estimated wealth fell to $US3.1 billion ($A4.12 billion), from $US5.3 billion in 2008, following a drop in the share prices of his casinos and media interests.
Mr Packer's interests in Australia include the Crown casino in Melbourne and the Burswood casino in Perth.
Mr Forrest, the boss of Fortescue Metals Group Ltd, crashed to fifth, after his fortune shrank to $US1.65 billion ($A2.19 billion), from almost $US5 billion, as waning China demand for iron ore caused Fortescue's shares to drop by two-thirds.
Second on the list was shopping centre developer Frank Lowy, whose wealth decreased to $US2.8 billion ($A3.72 billion), from $US4.4 billion.
Harry Triguboff, head of Australia's biggest builder of apartments, Meriton, was third with $US2 billion ($A2.66 billion), down from $US2.7 billion.
Forbes Asia said that overall, Australia's billionaires and millionaires were less wealthy than they were 12 months ago, when the global financial crisis began to bite.
The number of billionaires among Australia's 40 richest business people contracted from 16 to nine.
However, three increased their wealth.
The head of hedge fund group CQS, Michael Hintze, had $US150 million ($A199.15 million) more to roll in and was in 12th position with $US900 million ($A1.19 billion).
At number 14 was Macarthur Coal founder Ken Talbot, whose fortune grew to $US750 million ($A995.75 million), from $US620 million.
Property tycoon Maurice Alter's wealth grew by $US20 million ($A26.55 million), to $US590 million ($A783.32 million).
Forbes Asia said Australia's tycoons were also getting older, with 16 on the list of 40 aged 70 years or more.
Packaging magnate Richard Pratt, who died in April from cancer aged 78, was replaced on the rich list by his son Anthony.
Anthony Pratt, who now heads Visy Industries, was in sixth spot, with a net worth of $US1.6 billion ($A2.12 billion).
Other newcomers to the list were Reece Australia chairman Leslie Alan Wilson at 28th with $US445 million ($A590.81 million), and gaming magnate Bruce Mathieson at 36th with $US350 million ($A464.68 million).
Mining heiress Gina Rinehart remained Australia's richest woman and seventh overall with $US1.5 billion ($A1.99 billion), down from $US2.4 billion in 2008.
Forbes Asia said that for the first time since it began compiling the annual list, a New Zealander was richer than the wealthiest Australian.
Kiwi Graeme Hart's mountain of money is estimated at $US4.7 billion ($A6.24 billion), well above Mr Packer.
Mr Hart made his fortune in the paper and packaging sector. (Credit: The Sydney Morning Herald)
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