Crown Las Vegas Project Up For Sale After Funding Crisis

03.28.2008 | 9:47 pm | News, casinos

A consortium of investors, including Australian giant Crown Casino Ltd, have been forced to put a $5 billion Las Vegas project up for sale after the group failed to supply the increased equity which was being demanded by their lenders. While no official announcement has been made, the consortiums inability to attract another investor to the project has forced them to hoist the for sale sign. So what next?

There had been ambitious plans to build the tallest tower in Las Vegas as part of the project, together with a 5,000 room hotel, casino and other entertainment facilities. Normally the venture would have been able to attract the required additional capital but with money markets still tight and investors running scared after recent stock market falls, all is not well in the world of finance. While the site has affectively been put up for sale, the likelihood of receiving an acceptable offer in the short term seems to be fairly remote. All but the highest quality blue chip investments are able to attract the additional capital required, and even then the terms are not as good as they once were.

There is every chance that we will see some of the larger casino ventures scaled down or delayed over the next few months as the industry finally realises that it is not insulated from the affect of the on going credit crunch. Those with funding already in place may well be in a great position to pick up ventures such as the Crown Las Vegas one for a sub-market price, with the possibility of reselling for a substantial profit once the credit crunch works its way through the system.

The next few months are most defiantly a buyers market in general industry, and with the possibility that some casinos will struggle as the economy slows, the number of casino assets up for sale could begin to grow.