Australia’s biggest casino owner, Publishing & Broadcasting, is planning to spend at least $1.8 billion on gambling acquisitions in Pennsylvania.
The purchase will include a casino and horse racetrack owned by Harrah’s Entertainment Inc., the world’s largest casino company. Publishing & Broadcasting is controlled by Australia’s wealthiest man, James Packer.
With $1.5 billion of casino purchases in Canada and the U.S. this year to focus on its fastest-growing business, Publishing & Broadcasting plans to split the media and gaming assets, freeing up another $2.7 billion of cash for acquisitions.
“We don’t assume that the acquisition pipeline will cease if this transaction is completed,” said Jenny Owen, an analyst at Citigroup Inc.
Publishing & Broadcasting owns two Australian casinos and has partnerships for others in Asia, Europe and North America, so they know all about casino games. Completion of the deal may take between 12 months and 18 months, Sydney-based Publishing & Broadcasting said in the statement, released to the media.
Purchase from Harrah’s
The Aussies may buy the Chester Casino from Harrah’s, which is being acquired by buyout firms TPG Inc. and Apollo Management Group. Meadows Racetrack & Casino may be sold to Packer’s company by Bill Paulos and Oaktree Capital Management LLC.
Chester operates more than 2,700 slot machines in 100,000 square feet of gaming space that is open 24 hours every day. Gambling revenue in Pennsylvania attracts a 55 percent tax rate, according to Citigroup’s Owen. Chester started its slot machine business in January, is expected to have an annual profit after gaming taxes of $165 million, she said.
Publishing & Broadcasting raised $5.2 billion in cash last year selling control of its television and magazine assets into a venture with buyout firm CVC Asia Pacific Ltd.
Publishing & Broadcasting’s gambling assets include Crown casino in Melbourne, Australia’s biggest, Burswood in Perth.
The company opened the Crown Macau in May, its first casino in the former Portuguese colony, and the only place in China where casino gambling is legal.
The venture, known as Melco PBL Entertainment (Macau) Ltd., raised $1.14 billion in an initial share sale in December.