Written By Carla Harris
Some of Australia’s richest men have fallen on hard times, well by their standards anyway! In the past 12 months, shaky economic circumstances and a fall in share prices have caused a loss of more than $5 billion among the country’s wealthiest, but one of the hardest hit by the financial decline is businessman James Packer. The gambling bigwig and chairperson of Crown Resorts, one of Australia’s biggest entertainment and resort groups, is now $1.8 billion poorer on paper, according to Sky News Australia.
Packer, son of Kerry Packer, the late media mogul, inherited the family company, Consolidated Press Holdings Ltd. He soon tired of the traditional press and began forging a future in international gambling and tourism with Crown Resorts, a group that not only has two of the biggest entertainment complexes in Australia (Crown Casino and Entertainment Complex, Melbourne and Crown Perth), but also resorts in Macau, the high-end Aspinall’s Club, London, and is currently invested in a building in Sri Lanka that was set to be completed this year.
As reported by New Zealand’s Business Day, Crown Resorts has seen a 28% fall in share price and operations are not running as smoothly as they did in the past. ‘Crown's two Australian casinos have been hit by sluggish consumer spending while plans for a $US400 million casino development in Sri Lanka look to have stalled after a change of government.’
This is not the first time billionaire Packer and his Crown Resorts have faced an uncertain future. Back in 2008, an attempt to enter the Las Vegas gambling industry resulted in losses of US$250 million investment as Fontainebleau Resorts ended up filing for bankruptcy. It was reported in the Sydney Heraldin 2009 that this was one of a number of failed bids to crack ‘the coveted Las Vegas market’.
Packer was not the only member of the ‘Rich List’ to feel the pinch. Andrew Forrest, chairman of Fortescue Metals Group, was the hardest hit with the fall of mining stock taking $2.5 billion of his paper wealth. This also affected Kerry Stokes, chairman of Seven Groups Holdings, another one for the mining industry.
Mining aside, the fall in share price for Crown Resorts does say something about the current state of Australia’s gambling industry. Does this mean that Australians would rather choose convenience and play their Pokies online than go through the effort of visiting a land-based casino or resort?