Packer’s second chance

“You can’t be in the gaming industry and not have a special reverence for Las Vegas — that’s where it all began. While we fell short in past attempts to enter that market, we now have the ideal opportunity.” So said James Packer with diplomatic understatement. For “fell short” substitute “fell on our face” and the statement becomes completely accurate. Unlike soon-to-open SLS Las Vegas, Packer’s got a terrific location, with Encore and Fashion Show Mall close at hand. (Trump International‘s there too, but it’s more of a potential beneficiary than a benefit.) Morningstar analysts add that Crown Resorts is on “much stronger footing” this time around and will be able to fill a yawning gap in its portfolio: no stateside property where it can entertain its VIP patrons when they travel to Sin City.

Packer’d better be right this time around. He lost $737 million on Fontainebleau alone, never mind ill-timed investments in Harrah’s Entertainment and Station Casinos — all gone. An attempt to purchase Cannery Casino Resorts dissolved into a $320 million breakup fee. Confronted with the American market, Packer’s business acumen has always deserted him. Maybe this time is the charm.

His business partner, Andrew Pascal, is an interesting choice. No doubt his years as Steve Wynn‘s go-to guy were what landed him the Packer gig. But Pascal knows the manufacturing sector, having run Silicon Gaming for three years. Proving there’s life after Wynn Resorts, Pascal incepted PlayStudios, creator of MGM Resorts Intenational‘s social casino, MyVegas. This makes him one of the few executives in the brick-and-mortar side of the industry who know both the slot world that the Baby Boomers favor and the social gaming for which millennials spurn slots. It looks like Packer made a very good pick in Pascal.

Don’t get all hot and bothered about construction yet. Shovels won’t go into the ground on the old New Frontier site until the second half of 2015.

It looks as though the Tohono O’odham Nation is gearing up to start construction on its Glendale-area casino plan. Four construction firms have already been retained. Although legal hurdles like optional National Indian Gaming Commission approval remain, the Tohono O’odham may well decide that every day not spent on casino development is an opportunity lost. As casino-law expert Heidi McNeil Staudenmaier puts it, “The safest route is to wait until everything’s done. Now, how long is that going to be? Two months? A year? Several years?”

The tribe has, through a combination of congressional authorizations and loopholes, met the criteria to build a casino outside Glendale. Says Arizona State University‘s Robert Clinton, “They can build whatever they want. Whether they can game [sic] in the casino they build is another question.” (Opponents say the main gaming involved is of the system.)

Although it says it could get a casino up and running in 18 months, the tribe is likely to await a final benediction from the Ninth Circuit Court of Appeals, which had been awaiting a Supreme Court ruling on sovereign immunity. However, waiting brings its own hazards. As long as the Tohono O’odham-supportive Obama administration holds a majority in the U.S. Senate, bills by Rep. Trent Franks, Sen. Jeff Flake and Sen. John McCain (all R-AZ) are all unlikely to see action. But if control of the Senate changes this November, all bets are off, especially with Franks’ bill already having been voted out of the House of Representatives and sent to the upper chamber, where it currently languishes.

Should the tribe build the casino and risk being essentially locked out of it? For the Tohono O’odham, both action and inaction are fraught with risk.