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Arnold M. Knightly

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Crown exits bid for casino license

26 Feb 2009

By Arnold M. Knightly

The sister of Crown Ltd. Chairman James Packer and three investors have asked gaming regulators to withdraw their names from an application seeking a license to operate casinos in Pennsylvania.

Gretel Packer and three unnamed company investors recently filed petitions with the Pennsylvania Gaming Control Board requesting to withdraw from the licensing process to maintain their privacy on a number of issues.

Crown is buying Cannery Casino Resorts for $1.8 billion and needs Pennsylvania regulators' OK because Cannery operates a racino near Pittsburgh.

Gretel Packer on Monday sued Cannery's owners claiming the Packer family trust, Consolidated Custodians International Ltd. Bahamian, "are not parties" to the buyout and can withdraw from licensing.

"It turns out that the approval process in Pennsylvania, but not in Nevada, required licensing applications to be made by the trusts and Gretel Packer as a beneficiary," the lawsuit filed in Delaware Chancery Court in Wilmington said.

The lawsuit said the Cannery's owners have suggested "the true reason for plaintiffs' withdrawal from the licensing process" was "collusion with Crown as a pretext for reneging on the purchase agreement."

Bill Paulos, co-owner of Cannery Casino Resorts, declined to comment on communications between Cannery and Crown.

Crown in a statement Monday said the casino company "is committed to the Cannery acquisition" and continues to work with Pennsylvania regulators to resolve any application issues.

Paulos said Tuesday that everything is moving forward.

"We expect (Crown) to be licensed (in Pennsylvania) towards the end of March," he said.

Gretel Packer and the investors are "meeting with Pennsylvania (regulators) this week to try and work out a compromise on their confidentiality issue."

Nevada regulators approved Crown's buyout of the Cannery in January.

Dennis Neilander, chairman of the Nevada Gaming Control Board, said regulators examined the trusts' structure and determined "ultimate control was vested" in James Packer.

"We examined each trust, including the trustees and beneficiaries," Neilander said.

"Nevada laws essentially require that the regulators license those persons who control the stock. In each of these trusts, (James) Packer is the controlling person as a trustee," he added.

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