Crown Bets Cannery Casino Portfolio Will Be Ace in the Hole

At a time of economic uncertainty and a weak dollar, Crown Ltd.’s $1.7 billion agreement this week to buy Cannery Casino Resorts L.L.C. is the latest signal that international investors see favorable odds in U.S. gaming venues.

The deal will considerably deepen the Australian firm Crown’s footprint in the coveted U.S. casino market. A joint venture of majority partner Milennium Gaming Inc. and Oaktree Capital Management L.P., Cannery Casino Resorts operates three properties in the Las Vegas area plus a fourth in Pittsburgh.

Crown apparently also liked Cannery’s redevelopment pipeline. Next September, the firm is scheduled to wrap East Side Cannery, which will replace the Nevada Palace in East Las Vegas. And in April 2009, the firm will complete the new Meadows Racetrack & Casino in Pittsburgh, which will replace a temporary facility by the same name on that site. Taken together, the Cannery properties will constitute a portfolio of 720 hotel rooms, 8,400 slots and 75 tables. Crown must receive approvals from Pennsylvania and Nevada gaming authorities before closing on the deal, a process that Crown expects to take at least a year.

The Cannery acquisition deal marked the second milestone this week for Crown’s North American casino interests. On Tuesday, Starlight Casino, a 100,000-square-foot gaming and entertainment venue opened in New Westminster, British Columbia. The C$100 million Canadian project is a joint venture of Gateway Casinos and Entertainment Inc., a Crown affiliate, and British Columbia Lottery Corp.

Crown is hardly the only foreign investor to cast its lot with the U.S. gaming market recently. Dubai World, an investment firm from the Middle Eastern emirate, paid $1.19 billion in October for a 4.8 percent of MGM Mirage’s outstanding shares. That move came a month after Dubai World made a $2.7 billion investment in CityCenter, MGM Mirage’s 66-acre master-planned project in Las Vegas.

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source: commercialpropertynews.com