James Packer is interested in introducing his Crown Casino brand into the American gambling market. He is currently in talks with Deutsche Bank to purchase the Cosmopolitan Casino in Las Vegas for up to $2 billion. The Cosmopolitan has an interesting past, which has led the property to struggle since it was opened for business in 2010.
Construction started on the casino in 2007 by Ian Bruce Eichner and the development group 3700 Associates, LLC. A year later, the developer failed to make payments on $760 million construction loan from Deutsche Bank. Eventually, the bank took over the project and it was finally opened to the public four years ago.
Despite the fact that the Cosmopolitan is one of the most impressive properties on the Las Vegas Strip, the casino has struggled to be profitable. The resort hosts nearly 3000 rooms, a 75 000-sq ft casino, dozens of retail shops and restaurants, a 40 000 spa & gym and a theatre. However, the extravagant facilities alone have not been enough to keep the casino afloat.
Deutsche Bank has little experience in the gambling market, so the casino has struggled. As such, it seems to be best for the property if it is acquired by an experienced gambling operator like Crown Resorts. Currently, the brand operators several casinos around the world, including in Australia, Macau and the Philippines. Packer’s success could also see the brand enter into gambling markets in Japan and Sri Lanka.
This is the second time that Crown has attempted to enter the American gambling market. Previously, Packer had his sights set on America shortly before the financial crisis. Now that there seems to be some recovery, now looks to be the ideal time. Entering the land-based market in Las Vegas would also make Crown well-positioned to enter the American online gambling industry.
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