James Packer’s Crown Resorts has bought 50% of Betfair Australasia for $10 million as the gambling business announces surging profits.
Crown already owns the remainder of Betfair Australasia, so the deal, which was announced to the Australian Stock Exchange yesterday, gives Crown full control of the gambling business.
Betfair Australasia was formed in 2004 as a 50/50 joint venture between Crown and Britain’s Betfair Group.
But the joint venture struggled to make a profit in Australia’s competitive gambling industry.
Packer’s move turns the tables in a market which has been characterized by offshore operators acquiring local businesses.
However, the British Betfair Group will continue to provide technology and support services to Betfair Australasia.
Fairfax reports 160 staff at Betfair will remain with the business.
SmartCompany contacted Betfair for comment but did not receive a response prior to publication.
The Betfair acquisition is just the latest part of Packer’s strategy to build his wealth through commercial gambling rather than the media empire his father focused on.
Melbourne based Crown today announced turnover of $655 million this year, up from $396 million last year.
Crown is the world’s most richly-valued gambling company now and Packer’s personal wealth is estimated at $7.7 billion and making him Australia’s second richest person.
The growing profits will provide extra cash for Packer as Crown works on possible projects and ventures in Sydney, Brisbane, Sri Lanka, Manila and Japan.
Just last week Packer bought 34.6 acres of land on Las Vegas Boulevard for $400 million.
The land is the former site of the Frontier casino that went bust in 2007.
Cara Waters is the editor of SmartCompany. Cara was previously a senior reporter at the Financial Times website FT Adviser in London and has also worked for The Sunday Times.
