AR­RESTED DEVEL­OP­MENT

The fates and for­tunes of James Packer

The Monthly (Australia) - - FRONT PAGE - BY RICHARD COOKE

“Ladies and gen­tle­men, I have made many, many mis­takes in my life, but in­vest­ing in China is not one of them.”

– James Packer, speech to the Asia So­ci­ety, 14 March 2013.

Af­ter walk­ing down streets con­tain­ing sev­eral of the largest build­ings in the world, a half-scale replica of the Eif­fel Tower, and a full-scale replica of St Mark’s cam­panile, I found my­self fix­at­ing on the un­medi­ated pat­terns of a bi­tu­men car park. It was the first real thing I’d seen in hours. There is some­thing called “Stend­hal syn­drome”, where tourists be­come over­whelmed by the beauty of Florence or the Sis­tine Chapel. To suf­fer “Ma­cau syn­drome” is to be awe­somely un­der­whelmed by im­pe­ri­ous scale.

Ma­canese lo­cals talk about an odd ef­fect where the real city, some of it colo­nial Por­tuguese build­ings hun­dreds of years old, has started to feel fake as well. The scale is all so large that ev­ery­thing nor­mal be­comes small, as though pro­jected on a green screen. Per­haps it is a kind of pro­jec­tion. City of Dreams is the name of one of James Packer’s casi­nos here, and it’s a good name, one that cap­tures the re­la­tion­ship between this Chi­nese spe­cial ad­min­is­tra­tive re­gion and main­land China’s de­sires. So what do one and a half bil­lion peo­ple want? Fine watches and gam­bling on card games, and not a lot else.

I had put on a suit to visit the sparsely peo­pled VIP rooms at City of Dreams, try­ing to be in­con­spic­u­ous. It had the op­po­site ef­fect – ev­ery­one else was wear­ing leisure wear. I watched a man wear­ing a wind­cheater and an Aude­mars Piguet time­piece play bac­carat with a chip stack half a mil­lion dol­lars deep, and thought of the casino from Ian Fleming’s Casino Royale, with its “hid­den metronome … tick­ing up its lit­tle trea­sure of one-per-cents with each spin of a wheel and each turn of a card – a puls­ing fat-cat with a zero for a heart”.

This is not the James Bond ver­sion of bac­carat though. There are no plaques or pad­dles, no go­ing eye-to-eye­patch with a vil­lain across the baize. In­stead it is one of the only casino card games where skill plays zero role. There is barely even any player agency, and the op­ti­mum strat­egy is to bet on the banker every sin­gle hand. When a player sits down, their des­tiny is al­ready writ­ten in­side the deal­ing shoe. It is not so much a game of chance as a game of fate.

This qual­ity makes it al­most un­playable for most Western gam­blers, and favoured by those from Asia. The most fa­nat­i­cal bac­carat play­ers some­times wear red un­der­pants or en­ter casi­nos only through the side door. Seats marked with the un­lucky num­ber “4” are very rare. There is a rit­ual where play­ers will peek at their cards, not by turn­ing them over but by peel­ing them back from the ta­ble and bend­ing the cor­ners, and some­times slap­ping or even blow­ing to try and magic the right num­ber of pips into be­ing.

As a game, it is sim­ple enough not to sus­tain much en­quiry, and es­pe­cially te­dious to watch. But as a phe­nom­e­non, its ef­fects are al­most un­be­liev­able. That cor­ner-bend­ing habit means most Ma­cau casi­nos will burn more than a mil­lion packs of cards a month. The Vene­tian Ma­cau is re­ally a tem­ple to bac­carat. It has more than 850 shops, 3000 ho­tel rooms and 800 gam­ing ta­bles, the vast ma­jor­ity ded­i­cated to the game. By floor space it is the sev­enth-largest build­ing on earth.

The Vene­tian is owned by the Las Ve­gas casino mag­nate Shel­don Adel­son, the self-de­scribed “rich­est Jew in the world”. Adel­son also owns the Sands Ma­cau casino. Opened in 2004,

it was the first out­side op­er­a­tion to break the Chi­nese gov­ern­ment–man­dated mo­nop­oly run by the no­to­ri­ous busi­ness­man Stan­ley Ho. The Sands didn’t ex­actly have a rib­bon-cut­ting cer­e­mony; in­stead, a mob of 15,000 peo­ple broke down its doors on the first day. One po­lice­man fired shots in the air to try to calm them. The casino cost more than a quar­ter of a bil­lion dol­lars to build, a sum re­couped in its first eight months of op­er­a­tion.

Four years ago, Ma­cau’s VIP rooms alone saw more than US$1 tril­lion in chips change hands, al­most all of it on bac­carat. That is more money than was with­drawn from every ATM in the US in the same pe­riod. Per­haps $200 bil­lion in “ill-got­ten” money makes its way to Ma­cau every year, ac­cord­ing to a US con­gres­sional re­port. At the height of its for­tunes, Ma­cau’s gam­bling rev­enue was seven times that of Las Ve­gas.

Bac­carat is also why there are 17 em­ploy­ees of Crown Re­sorts, sev­eral of them Aus­tralians, in­terned in Chi­nese de­ten­tion cen­tres on un­known gam­bling-re­lated charges. Among the many other fac­tors re­spon­si­ble is the am­bi­tion of James Packer, Australia’s most scru­ti­nised busi­ness­man, and a man who has a tabloid-pleas­ing habit of suf­fer­ing fi­nan­cial and emo­tional tur­moil at the same time. The ar­rests of his staff in Novem­ber, ap­par­ently care­fully timed by the Chi­nese gov­ern­ment, also co­in­cided with the break­down of his re­la­tion­ship with the singer Mariah Carey. It was not the first such co­in­ci­dence.

It was in fact an echo, al­most a copy, of the ex­pe­ri­ence that still de­fines James Packer in the pop­u­lar imag­i­na­tion. In 1999, Packer con­vinced his fa­ther, Kerry Packer, and Lach­lan and Ru­pert Mur­doch to in­vest in the telecom­mu­ni­ca­tions com­pany One.Tel. It failed not long af­ter, in 2001, and so too did his mar­riage to model Jodhi Meares. He suf­fered a deep and well-pub­li­cised de­pres­sion, and gar­nered a rep­u­ta­tion as a naïf who was im­per­illing the fam­ily legacy with bad busi­ness de­ci­sions. It is not un­usual that this nar­ra­tive is un­fair; such is the na­ture of the me­dia. What is un­usual is that this nar­ra­tive was in part cre­ated by James’ own fa­ther.

James Packer is not the only for­eign busi­nessper­son who has found trou­ble in­vest­ing in Ma­cau, and it’s in­struc­tive to com­pare his treat­ment with others. The casino in­dus­try can be ex­tremely volatile; so too do­ing busi­ness in China. It is not un­com­mon for bil­lion­aires of all stripes to suf­fer set­backs or even come close to the shoals of bank­ruptcy. (Just ask Don­ald Trump.) But, as far as I can tell, no one has de­scribed the $2.4 bil­lion re­duc­tion in Shel­don Adel­son’s per­sonal worth as “ex­tremely hu­mil­i­at­ing”, or con­cern-trolled about his men­tal health. The Aus­tralian me­dia’s re­la­tion­ship with James Packer is un­usu­ally, and some­times grotesquely, emo­tional, per­haps be­cause his story can be press-ganged to serve a se­ries of clichéd sto­ry­lines that are ir­re­sistible.

One cliché is prover­bial: the squan­der­ing of a fam­ily for­tune. “Wealth does not pass three gen­er­a­tions” is a Chi­nese proverb; An­drew Carnegie re­it­er­ated it as “shirt­sleeves to shirt­sleeves in three gen­er­a­tions”. There are Scot­tish and Ja­panese vari­a­tions, and it ap­pears in the 600-year-old writ­ing of Ibn Khal­doun. James Packer is the fourth gen­er­a­tion of wealth – his great-grand­fa­ther Robert Clyde Packer founded the fam­ily’s me­dia dy­nasty – and so seems over­due. Forbes mag­a­zine asked him di­rectly a few years ago if he had wor­ried, when Las Ve­gas casino in­vest­ments were hit by the global fi­nan­cial cri­sis, about de­stroy­ing gen­er­a­tions of Packer wealth. “I don’t want to an­swer that,” he replied.

The prodi­gal-scion an­gle can’t ex­plain it alone, how­ever. Lach­lan Mur­doch has never been the fo­cus of the same at­ten­tion, de­spite many fail­ures. James Mur­doch is anony­mous by com­par­i­son. Lawrence Ho, James Packer’s part­ner in the Ma­cau-fo­cused Melco Crown joint ven­ture, is the son of Stan­ley Ho; few ask aloud whether he is with­er­ing in his fa­ther’s shadow. James Packer loathes the spot­light al­most vis­cer­ally, but gen­er­ates more cov­er­age than any other Aus­tralian busi­ness­man. The dif­fer­ence is that these other men are work­ing for their fa­thers, who are still alive. Kerry Packer died in 2005, and James Packer is com­pet­ing against an image of his fa­ther that be­comes less and less like the real man every day. Kerry Packer is now less a per­son than a sym­bol of another Australia.

This ten­sion between Kerry and James Packer is so Freudian that the best de­scrip­tion of it comes from Freud him­self. “One’s fa­ther is rec­og­nized as the para­mount dis­turber of one’s in­stinc­tual life; he be­comes a model not only to im­i­tate but also to get rid of, in or­der to take his place,” he wrote in ‘Some Re­flec­tions on School­boy Psy­chol­ogy’. “Thence­for­ward af­fec­tion­ate and hos­tile im­pulses to­wards him per­sist side by side, of­ten to the end of one’s life.” This hos­til­ity was re­hearsed a gen­er­a­tion ear­lier. The Packer curse is some­where on the Y chro­mo­some.

Kerry Packer said many times that the hap­pi­est day of his life was when his fa­ther died. Sir Frank Packer was cold and abu­sive, and while Kerry was beaten with a polo whip he did not have the worst of it. He was con­sid­ered the stupid son, or per­haps the more stupid son, a dyslexic who was good at sport and not much else. His el­der brother, Clyde, was the dauphin, and suf­fered ac­cord­ingly. He wanted to ex­pe­ri­ence higher ed­u­ca­tion, but Frank had other ideas. “You go to work for me. You’ll learn far more in the school of hard knocks.” The knocks were so hard that in time Clyde sev­ered ties with his fa­ther, put on a caf­tan and moved to Cal­i­for­nia, de­ci­sions he never re­gret­ted.

“I was sick of lug­ging this Packer per­sona around with me,” Clyde said later. “It was like go­ing away for the week­end with three steamer trunks … I sup­pose it was pri­vacy I was look­ing for.” The prospect of be­com­ing a cap­tain of in­dus­try had

be­come more and more nau­se­at­ing. “You be­come en­meshed in the ty­coon syn­drome. It’s self-de­struc­tive. You lose your­self. Your per­son­al­ity be­comes smaller and smaller. I think it’s a gi­ant cover-up for in­fe­ri­or­ity.” It was Kerry who would be­come the ty­coon in­stead.

Kerry was de­ter­mined not to re­peat Frank’s mis­takes, and tried hard. But there was a sim­i­lar streak of cru­elty to his fa­ther­ing. “I’m sure that in his heart he re­ally loved James, but he damn well didn’t show it,” the for­mer Packer ex­ec­u­tive Al “Chain­saw” Dun­lap told Paul Barry. James’ for­mer fi­ancée Kate Fis­cher told friends that Kerry would some­times bully his son so badly he would cry in the shower, and his ex-wife Jodhi Meares spoke of late-night abu­sive phone calls that put a strain on their mar­riage. There was a tiny equi­lib­rium point of ab­so­lute ap­proval, one im­pos­si­ble to main­tain. If James was mak­ing money, the bul­ly­ing would stop. If he made too much, Kerry seemed to be­come al­most jealous of his son, and the pub­lic dress­ing-downs would be­gin again.

Com­pare this with the tra­jec­tory of Lach­lan Mur­doch, another gilded son who lost fam­ily money on One.Tel. Both sons con­vinced their mogul fa­thers to in­vest, and both lost hun­dreds of mil­lions. But Ru­pert Mur­doch’s re­sponse was wry. When James Packer apol­o­gised to him at a party, Mur­doch se­nior only said, “It’s okay, James. Just make sure you learn the lessons.” Mean­while, as Pamela Wil­liams re­ported in the book Killing Fair­fax, “to the out­side world Kerry Packer seemed to take sat­is­fac­tion from his son’s fail­ure”. When the dot­com bub­ble burst, Packer se­nior was not cha­grined but elated. “I told you you’d fuck it up,” he snarled. James had a per­va­sively pub­li­cised break­down.

Even­tu­ally, re­al­is­ing how se­ri­ous mat­ters were, Kerry tem­pered the schaden­freude. When Fair­fax news­pa­pers re­ported on James’ cri­sis, and his sub­se­quent suc­cour in the arms of Tom Cruise and Scien­tol­ogy, Packer se­nior even sent a copy of the United Na­tions Hu­man Rights char­ter to Fair­fax CEO Fred Hilmer. But the con­cern didn’t di­min­ish the vin­di­ca­tion. The old school had tri­umphed. The in­ter­net was bull­shit. Pay TV was bull­shit. The telecom­mu­ni­ca­tions in­dus­try that re­ally counted was still Chan­nel Nine.

Hid­den was the fact that Kerry had signed off on the One.Tel agree­ments as well. He knew the fig­ures. And over the same pe­riod James had made far-sighted de­ci­sions for the fam­ily com­pany. He had per­son­ally seen off the Su­per League split, and com­man­deered some of Fox­tel as a re­sult. He was recog­nis­ing the po­ten­tial of the in­ter­net, some­thing his fa­ther would never un­der­stand, and later in­vested in some of its best “stand­alone” clas­si­fied por­tals, such as seek.com.au, bleed­ing Fair­fax in the process. He had ef­fec­tively bought Crown Casino in Melbourne for less than its build cost. But these suc­cesses were lost in the court pro­ceed­ings (which Kerry did not at­tend) and the emo­tional fall­out.

In court, One.Tel’s founder, Jodee Rich, claimed that James was tak­ing things so hard be­cause his mo­ment of emo­tional eman­ci­pa­tion had been taken away from him. He was no longer his own man.

Rich told the ABC that James was a “lov­ing son” and that “Kerry was an ex­traor­di­nar­ily evil fa­ther”.

“I think it was a very com­pli­cated fa­ther–son re­la­tion­ship, and James told me once that he said to Kerry, ‘I don’t need your money any­more, I have my own in­de­pen­dence. Jodee and One.Tel have bought me my own in­de­pen­dence.’”

James Packer has de­nied this, but at least one other Packer se­nior ex­ec­u­tive, for­mer Pub­lish­ing and Broad­cast­ing Lim­ited man Daniel Pe­tre, agreed that Kerry had let James “take the fall” to cut him down to size.

Cer­tainly Kerry’s vol­u­ble dis­plea­sure cov­ered up many fail­ings of his own. When Al Dun­lap was brought in to cut waste at PBL, he found Kerry had been buy­ing com­pa­nies al­most at ran­dom. There was a ship­builder in Am­s­ter­dam, a flu­o­res­cent lamp man­u­fac­turer in Hong Kong. No one had any idea of the real state of the as­sets. Kerry had also lost huge sums on cur­rency trad­ing. In 1993 alone he lost half a bil­lion dol­lars this way, but qui­etly and with­out re­crim­i­na­tions. And then there were the gam­bling losses.

“Packer can’t play bac­carat” was a piece of graf­fiti scratched into the lifts of the old Aus­tralian Con­sol­i­dated Press build­ing in Syd­ney’s Park Street, in­so­lence the boss was es­pe­cially dis­pleased by. In Las Ve­gas his punt­ing as­sumed leg­endary sta­tus, and his hit-and-run pres­ence was feared by casi­nos. He played cards for huge stakes, some­times work­ing mul­ti­ple hands, plac­ing prop bets and eat­ing hot­dogs all at the same time. Casi­nos oc­ca­sion­ally banned him for win­ning too much, some­thing he took great plea­sure in.

He is ru­moured to have bro­ken the bank at Lon­don’s Aspinalls Club and to have been de­clared per­sona non grata at the MGM Grand Casino in Las Ve­gas af­ter re­ported bac­carat wins to­talling al­most $30 mil­lion. Still, the losses ran deeper. Fol­low­ing me­dia sto­ries about a $34 mil­lion bath in Ve­gas, Mark Latham crit­i­cised the “Big Fella” un­der par­lia­men­tary priv­i­lege: “No­tions of pub­lic moral­ity and jus­tice are un­der threat when it is pos­si­ble for one per­son to accumulate such ex­tra­or­di­nary wealth and then use it in such an ex­tra­or­di­nary way.” Packer pointed out that it was his money, and he had given more to hos­pi­tals.

“Some of the hap­pi­est times I ever saw my dad was times when I was with him in the casi­nos and he had a good night,” James Packer told Forbes in 2014, and there has been plenty of spec­u­la­tion since about the emo­tional nexus gam­bling rep­re­sents between fa­ther and son, per­haps a sense that James may be “sid­ing with the house” in some fi­nal ef­fort to ex­er­cise con­trol over his own des­tiny. There’s a fur­ther layer of tan­gled feel­ing: one of James’ clos­est friends, Ben Til­ley,

be­came a semi-per­ma­nent gam­bling buddy of Kerry’s – the mogul came to re­gard him as a bit of a lucky charm.

But psy­cho­an­a­lytic ex­pla­na­tions aren’t nec­es­sary. There’s every chance that James sim­ply took an un­sen­ti­men­tal view of his fa­ther’s em­pire when he in­her­ited it. He has a bet­ter sense of fig­ures than he is of­ten cred­ited for. Me­dia stocks were over­val­ued. Gam­ing stocks were not. He had no in­ter­est in be­ing a me­dia pro­pri­etor, es­pe­cially when lime­light was a by-prod­uct. Un­like Kerry, he had no spe­cial emo­tional at­tach­ment to Chan­nel Nine or the Bul­letin mag­a­zine or any of the rest of it. And a tilt at a global em­pire, some­thing very few Aus­tralian busi­ness­peo­ple had man­aged, would re­quire a global in­dus­try like gam­ing.

There was another op­tion at the mo­ment of in­her­i­tance: to do noth­ing. He could per­ma­nently be­come “Jamie”, the polo­play­ing play­boy, and live off the in­ter­est on bil­lions. In 1994, aged 27, he told Peter FitzSi­mons in a rare in­ter­view that such an op­tion would ruin him. First through deca­dence and then through guilt. He wor­ried he would “self-de­struct”, through “gam­bling, fast cars, al­co­hol, drugs, what­ever it hap­pens to be”. He also spoke about the weight of ge­netic ex­pec­ta­tion.

“If I sat back and de­cided to sell the prod­uct of my fa­ther and my grand­fa­ther’s work, like a leech, you know I wouldn’t be able to look at my­self in the mir­ror … I want to be able to look at my fa­ther in ten years’ time and say, ‘I’m proud of you, and you should be proud of me.’” This re­la­tion­ship between pride and busi­ness suc­cess was so close that one of James’ friends later said that “his self-es­teem is the net present value of his as­sets”.

But the fa­mil­ial tan­gles that drive James Packer’s am­bi­tion can be dis­tract­ing. The real story is not Jamie Packer over­shoot­ing his Aus­tralian roots, not Jamie Packer try­ing to beat Kerry by be­com­ing the house, but James Packer as an ag­gres­sive and pre­scient busi­ness­man, some­times too pre­scient. His two big­gest fail­ures were caused by the dot­com bub­ble and the global fi­nan­cial cri­sis, and they were scar­ring, not mor­tally wound­ing.

What can we say, re­ally, of his fail­ings? That telecom­mu­ni­ca­tions wasn’t a growth in­dus­try in 1999? That there is some doubt about the growth po­ten­tial of the Chi­nese mid­dle class, and its en­thu­si­asm for gam­ing?

How Syd­ney de­cided that a casino for Asian high rollers be­longs at the heart of its har­bour is a tragedy, but not an Oedi­pal one. It does not have that grandeur, or that pedi­gree.

In 1980 only two US states, Ne­vada and New Jersey, had le­gal casi­nos. To­day you can gam­ble in 24 states, with others set to fol­low suit. In De­cem­ber last year, Ja­pan le­galised casi­nos, af­ter 15 years of de­bate, even though polling shows that only 12% of Ja­panese peo­ple sup­port this.

Sin­ga­pore’s long-time leader Lee Kuan Yew once said that casi­nos would be le­galised only over his “dead body”, but even­tu­ally two re­sorts opened in 2010, some of the most ex­pen­sive build­ings ever con­structed. Lee jus­ti­fied his re­ver­sal by telling par­lia­ment that “we can­not pre­vent the out­side world from af­fect­ing us”. Be­sides, they were for over­seas gam­blers, and Sin­ga­pore­ans had to pay a US$70 fee to en­ter. There is a long tra­di­tion of ju­ris­dic­tions with le­galised gam­bling try­ing to quar­an­tine their own ci­ti­zens; lo­cals are still banned from the rooms of the Casino de Monte-Carlo.

Where have all these casi­nos come from? They are partly the re­sult of a moral dereg­u­la­tion, as tra­di­tional re­li­gious op­po­si­tion to gam­bling has waned. But they are also the re­sult of a po­lit­i­cal re-or­der­ing. As gov­ern­ments scrounge for sources of rev­enue, gam­bling taxes of­fer a pain­less, if pro­foundly re­gres­sive, means of avoid­ing spend­ing cuts or other tax in­creases. This also re­sults in a quandary. As the so­cial psy­chol­o­gist Jonathan Haidt put it, “in their ca­pac­ity as reg­u­la­tors, state gov­ern­ments are charged with pro­tect­ing the pub­lic from the very busi­ness prac­tices that gen­er­ate rev­enue for the state and which the state is ac­tively co-spon­sor­ing”.

In the US the gam­ing in­dus­try em­ploys more peo­ple than air­lines do, but there is still an on­go­ing de­bate about whether the eco­nomic ben­e­fits (which are ar­guable) are worth the as­so­ci­ated so­cial harms. Gam­ing was once con­sid­ered a “re­ces­sion-proof” in­dus­try. In the post-re­ces­sion West, how­ever, it has plateaued, es­pe­cially among women over 50, once a stal­wart de­mo­graphic. In their cur­rent in­car­na­tions, casi­nos are now strange arte­facts of wealth in­equal­ity. They tar­get the poor­est with video poker ma­chines and the rich­est with trips to off­shore VIP rooms; these two cus­tomer classes may never cross paths.

In Australia, the most slots-heavy ju­ris­dic­tion in the world, this du­al­ity is only too fa­mil­iar. In 2014–15 poker ma­chines saw $73 bil­lion worth of play in New South Wales, de­spite a de­cline in the num­ber of ma­chines over­all. The Fair­field area in Western Syd­ney alone ac­counted for more than $7 bil­lion of this. Es­ti­mates of prob­lem gam­blers in Australia run to half a mil­lion peo­ple. There is some­thing es­pe­cially hyp­o­crit­i­cal about these ma­chines be­ing housed in “com­mu­nity clubs”, which en­joy tax breaks and other ben­e­fits be­cause of their sup­posed so­cial role.

The as­cen­dancy of poker ma­chines has provided a salient les­son in what Australia and its lead­ers value, and be­com­ing a gam­ing lob­by­ist is al­most the de facto post-po­lit­i­cal ca­reer for any La­bor “head­kicker”. But the ap­point­ments are bi­par­ti­san. Karl Bi­tar works as a lob­by­ist for Crown, as does Mark Ar­bib, and for­mer Howard gov­ern­ment com­mu­ni­ca­tions min­is­ter He­len Coo­nan sits on the com­pany’s board. The newly as­sem­bled lobby group Re­spon­si­ble Wa­ger­ing Australia (Crown’s on­line gam­bling por­tal, CrownBet, is a foun­da­tion mem­ber) im­me­di­ately se­cured the ser­vices of out­go­ing La­bor se­na­tor Stephen Con­roy as its head and roped in for­mer Lib­eral se­na­tor Richard Col­beck as chair­man. In the same week, for­mer NSW premier Barry O’Far­rell be­came head of Rac­ing Australia. His pre­de­ces­sor was ex-Na­tion­als MP Peter McGau­ran. Peta Credlin, Tony Ab­bott’s for­mer chief of staff, is also a Packer em­ployee.

Casi­nos in Australia al­ready en­joy an un­usual sta­tus. In Syd­ney, the Star, for ex­am­ple, is sui generis. It is ex­empt from New South Wales’ lock­out laws. It is prob­a­bly the most vi­o­lent venue in the state, but as a “premier tourist des­ti­na­tion” does not have to suf­fer the in­dig­nity of serv­ing liquor in plas­tic cups. A leaked re­port showed the Star was not re­port­ing as­saults to po­lice, and noth­ing hap­pened. There is a “Three Strikes” rule for venues that breach their licensing con­di­tions, but the Star breached them 12 times in 12 months with­out cen­sure. The Star’s high-roller rooms do not have to ob­serve to­bacco con­trol laws. It is per­haps the only place in the state where the footling in­ter­fer­ences of the NSW gov­ern­ment can­not be found.

Still, to truly ap­pre­ci­ate just how lubri­cated the wheels of gov­ern­ment are for gam­ing, it is a project not yet com­pleted that pro­vides the best ex­am­ple. James Packer’s “in­te­grated re­sort” at the cen­tre of Syd­ney’s Baranga­roo devel­op­ment has been de­scribed as “a phal­lic sym­bol of greed and kitsch with a vengeance” and an “opales­cent dildo”. It will be the se­cond-tallest build­ing in the city. But Baranga­roo is not re­ally go­ing to be built in Syd­ney at all. It is go­ing to be built in a dif­fer­ent place, with dif­fer­ent laws.

“The old man told me to ring … this is the mes­sage. If we don’t win the casino, you guys are fucked.” In the ten­der­ing process for the first Syd­ney casino in the early 1990s, James Packer was tasked with in­tim­i­dat­ing John Fa­hey’s Lib­eral gov­ern­ment into en­sur­ing the li­cence ended up in Packer hands. But it didn’t, and the Fa­hey gov­ern­ment folded not long af­ter­wards.

James Packer would not make the same mis­take twice. De­spite deals that the Star would not have a city-based ri­val, he had long eyed a se­cond Syd­ney casino, and con­sum­mately lob­bied politi­cians to bring it about. In Au­gust 2012 he went to see the then premier, Barry O’Far­rell, and made his case force­fully.

O’Far­rell sali­vated over the idea, and told Packer about a process that would en­sure there was no ten­der for the pro­posal. It’s sup­posed to be for “unique” ideas where com­pe­ti­tion would be of lit­tle ben­e­fit. The idea of a se­cond Syd­ney casino is hardly unique, and no one knows how Crown pros­e­cuted this ar­gu­ment. It was done in pri­vate. Just a week af­ter the O’Far­rell meet­ing, the need for in­de­pen­dent re­views over the process was done away with, some­thing the gov­ern­ment told Fair­fax Me­dia was a “co­in­ci­dence”.

The bid was se­cured in seven weeks, prob­a­bly record ra­pid­ity, and for­mer Com­mon­wealth Bank CEO and Packer wed­ding guest David Mur­ray was em­ployed to give it a rub­ber stamp in another pri­vate re­view process. It was given a favourable tax rate and green-lit with­out any­thing as em­bar­rass­ing as a pub­lic meet­ing. The project tried to damp down con­tro­versy by tar­get­ing over­seas high rollers only, es­pe­cially those from Asia, with VIP-only mem­ber­ship rules and min­i­mum bets on bac­carat start­ing at $30 a hand.

Ac­cord­ing to Michael Brodie of the In­de­pen­dent Liquor and Gam­ing Author­ity, the pro­bity check of Crown took just three months. He de­scribed it as “one of the fastest as­sess­ments of a casino ap­pli­cant in his­tory”. The devel­op­ment ap­pli­ca­tions were sim­i­larly ex­pe­dited, and Crown and the devel­oper Lendlease made nu­mer­ous changes to the ap­pli­ca­tions af­ter they were al­ready ap­proved, can­ni­bal­is­ing pub­lic park­land and sig­nif­i­cantly in­creas­ing the floor space. A com­mu­nity-based le­gal chal­lenge failed.

“We were talk­ing in broad con­cepts of a six-star ho­tel funded through a small high-rollers room,” one anony­mous source told Fair­fax. “Then MOD 8 [the mod­i­fi­ca­tion to the con­cept plan] came along and the casino turned into a large podium and a stonk­ing big res­i­den­tial sold to bil­lion­aire prop­erty in­vestors.”

Crown also lob­bied the Pro­duc­tiv­ity Com­mis­sion to in­tro­duce ex­press visas from China, and the Turn­bull gov­ern­ment obliged. Like the Star, the Baranga­roo casino won’t be sub­ject to al­co­hol re­stric­tions or smok­ing bans. James Packer has de­scribed one of the fastest ap­pli­ca­tion pro­cesses in the world as “a marathon process”. “We pro­posed the ho­tel al­most four years ago and we are miles be­hind our open­ing date sched­ule,” he said. “At our end we re­ally want to get mov­ing.” He has spo­ken of his love for Syd­ney, his long­stand­ing af­fil­i­a­tion with it, and his de­sire to leave a mark there. These days he mainly lives in Is­rael and Los Angeles.

The Amer­i­can think-tank head David Blanken­horn coined the phrase “gam­ble-speak” for the care­ful lan­guage prun­ing that ac­com­pa­nies the in­dus­try. Ex­ec­u­tives talk about gam­ing rather than gam­bling, cus­tomers rather than play­ers, and “in­te­grated re­sorts” rather than casi­nos. This is more than a se­ries of eu­phemisms (though, as Blanken­horn him­self points out, “gam­ing ex­ec­u­tives” al­most never game them­selves; James does not seem to share Kerry’s joy at be­ing on the other side of the ta­ble). It can also re­flect le­gal re­al­i­ties: for ex­am­ple, it is il­le­gal to pro­mote casi­nos in China, but it is not il­le­gal to pro­mote the “re­sorts” at­tached to casi­nos.

This can lead to some seem­ingly ab­surd in­sis­tences. For ex­am­ple, The Au­di­tion, the Martin Scors­ese–di­rected ad for Melco Crown’s Ma­cau Stu­dio City and Manila City of Dreams, was sched­uled to screen at the Venice Film Fes­ti­val in 2015. When crit­i­cised, the Venice fes­ti­val di­rec­tor, Al­berto Bar­bera, told the Hol­ly­wood Re­porter, “It’s a Scors­ese film, not a com­mer­cial. The casino paid for the film, but it’s not in the film at all.” You could be for­given for think­ing the black lim­ou­sines and the tow­ers of neon were the scene of a casino, but they only de­picted a re­sort. There was noth­ing as in­de­cent as a roulette wheel.

The sim­plest the­ory about the Crown ar­rests is that Crown pro­moted its busi­nesses, es­pe­cially its Aus­tralian busi­nesses, too di­rectly. “It of­ten amazes me that so many se­nior cor­po­rate lead­ers, pub­lic ser­vants and MPs have not made the trip to China and still view it as a com­mu­nist state,” Packer said in his Asia So­ci­ety speech, not the kind of com­pli­ment Bei­jing for­gives. China has a way of re­mind­ing for­eign busi­nesses that it re­mains a com­mu­nist state, es­pe­cially those who op­er­ate in the con­cen­tric ring of loop­holes some­times called “the grey”.

Con­sider the “grey” Crown and Melco Crown op­er­ated in. Gam­bling is il­le­gal in main­land China and pro­mot­ing off­shore casi­nos is for­bid­den as well. It is il­le­gal for those vis­it­ing Ma­cau to take more than US$3200 into the ter­ri­tory, and there are re­stric­tions on ATM with­drawals. For the heav­i­est gam­blers, lines of credit are re­quired, which is al­ways a risky propo­si­tion, but even more so when debt col­lec­tion agen­cies are il­le­gal as well.

Casi­nos in Ma­cau and in Australia rely on jun­ket busi­nesses to co-or­di­nate high-roller trips from the Chi­nese main­land. The jun­ket op­er­a­tors also do the busi­ness of of­fer­ing cash­backs on losses, side­bets out­side the casino econ­omy and, most im­por­tantly, col­lect­ing debts.

There were clear warn­ings that the grey zone jun­kets op­er­ated in was be­com­ing smaller. As early as Fe­bru­ary 2015, Hua Jingfeng, deputy head of China’s Min­istry of Pub­lic Se­cu­rity, pub­licly told re­porters that casino mar­ket­ing would be tar­geted. “A fair num­ber of neigh­bour­ing coun­tries have casi­nos, and they have set up of­fices in China to at­tract and drum up in­ter­est from Chi­nese ci­ti­zens to go abroad and gam­ble. This will also be an area that we will crack down on.”

This was not an idle threat. In Oc­to­ber 2015, 13 South Korean casino em­ploy­ees and 34 Chi­nese as­so­ci­ates were ar­rested, as part of an in­ves­ti­ga­tion into what state TV called “crim­i­nal gangs”. It was al­leged that sex­ual ser­vices were be­ing of­fered as part of the jun­ket-style op­er­a­tion. Per­haps Crown thought this style of in­duce­ment was too dif­fer­ent from theirs to worry about, but this now looks like a huge mis­cal­cu­la­tion. Its staff face 16 months in Chi­nese jails, on top of time al­ready spent in de­ten­tion, and the com­pany has en­gaged le­gal firm Min­ter El­li­son to in­ves­ti­gate its own man­age­ment. One ex­ec­u­tive told the Age it was “an act of cor­po­rate, le­gal and rep­u­ta­tional arse-cover­ing of the first or­der”.

Ex­actly why Crown pro­ceeded with its high-roller strat­egy

while this storm gath­ered is un­clear. Per­haps, in the grey, the line between what was and wasn’t al­lowed wasn’t clear, or shifted over time. Some of the spec­u­la­tion runs to al­most con­spir­a­to­rial lengths: that Crown was sin­gled out as col­lat­eral pun­ish­ment for Australia’s role in the South China Sea le­gal case. But cap­i­tal flight has been a con­cern of the Chi­nese gov­ern­ment for years, and a for­eign com­pany fall­ing foul of the Chi­nese Com­mu­nist Party needs no spe­cial ex­pla­na­tion.

Whether or not the ar­rests were the fi­nal cat­a­lyst, the vo­latil­ity was too much for Packer. Ear­lier in 2016 he had re­duced his stake in Melco Crown from 34% to 27%. Now he re­duced it to 14%, and aban­doned Las Ve­gas plans. More than one me­dia com­men­ta­tor said the events capped an “an­nus hor­ri­bilis” for Packer. Un­der­neath the front-page histri­on­ics, the busi­ness press were more even-handed. There was no doubt the sell-offs were a change of strat­egy from some­one for­merly in­tent on global dom­i­na­tion. Crown is now a firmly Aus­tralian com­pany. But the shed­ding of risk and heavy re­turns won re­spect. James Packer had quadru­pled his in­vest­ment, and knew when to cash out.

Less cer­tain is the out­look for those Aus­tralian arms of the busi­ness. An­a­lysts have al­ready down­graded VIP ex­pec­ta­tions on the back of the crack­down. Af­ter all, the new Crown casino in Syd­ney’s Baranga­roo devel­op­ment is aimed solely at Asian VIPs. The same strat­egy that wound up with Aus­tralian ex­ec­u­tives in Chi­nese jails will be re­peated, and this time the whole city has signed on.

Kerry Packer built his for­tune on the back of an un­canny abil­ity to divine the tastes of the Aus­tralian pub­lic, which re­ally meant ap­pre­ci­at­ing just how much they liked sport. He mod­ernised cricket in the process, but was per­haps most proud of the el­e­ments in his em­pire such as the Bul­letin mag­a­zine, the Sun­day cur­rent af­fairs pro­gram, and 60 Min­utes when it was at the height of its pow­ers. He cared enough about his me­dia to ring pro­duc­ers and com­plain about the way cred­its rolled.

In­stead, Packer ju­nior’s an­a­lysts di­rect phone calls to the fi­nan­cial press, urg­ing cor­rec­tions or ex­press­ing dis­plea­sure. James oc­ca­sion­ally calls jour­nal­ists him­self: he phoned the Syd­ney Morn­ing Her­ald gos­sip colum­nist An­drew Hornery to em­pha­sise the gen­uine­ness of his re­la­tion­ship with Mariah Carey, and his love and re­spect for her as woman and per­former. (In a typ­i­cally an­a­lyt­i­cal touch, the lat­ter af­fec­tion ref­er­enced her al­bum sales fig­ures.)

But James has no in­ter­est in be­ing a me­dia mogul, partly be­cause he doesn’t like the me­dia, and with good rea­son. The lime­light has not been kind to him. He has also swapped prof­it­ing from Australia’s pas­time – sport – for Australia’s vice – gam­bling – and there is a sense of un­easi­ness about that. No book­maker is a folk hero.

“Sport was bet­ter in the ’70s,” sang The Drugs, and it’s a fa­mil­iar re­frain that sports­peo­ple have been ho­mogenised, that there are no “char­ac­ters” left any­more, that agents and nan­ny­ish league ad­min­is­tra­tors and scan­dal-randy jour­nal­ists have ru­ined it. That seems true of busi­ness as well – the gulf that sep­a­rates Kerry Packer from James Packer is not just about two dif­fer­ent men, but two dif­fer­ent times, and two dif­fer­ent cul­tures as well.

It’s hard to say ex­actly what the pub­lic image of James Packer is in Australia. “Kerry Packer’s son” just about cov­ers it, but he is def­i­nitely seen as one of the rich kids. (Paul Barry’s book about the One.Tel col­lapse bears the same name.) Strangely Kerry is not seen as one of the rich kids, even though he was, per­haps be­cause his child­hood was marked by so much emo­tional pri­va­tion he seems self-made.

He made a mod­est me­dia com­pany into the largest per­sonal for­tune in Australia, and did it with a scrap­pi­ness and bel­liger­ence that seemed to typ­ify Australia in the 1980s. Kerry Packer also ful­filled the time­less, car­toon­ish ideal of an ec­cen­tric bil­lion­aire: hand­ing out wads of cash to the home­less and capri­ciously tip­ping ser­vice staff, keep­ing gold bars in his of­fice, a Glock in his drawer and a mis­tress down the street, watch­ing cricket on four TVs at once, yelling down phones, dress­ing down as­so­ci­ates, gen­er­ally be­ing “larger than life”, and prov­ing it by spend­ing decades on the brink of death.

You can iso­late any vi­gnette from Kerry Packer’s life and know its en­tirety. In 1990 he col­lapsed un­con­scious play­ing polo and was clin­i­cally dead for sev­eral min­utes (there was “noth­ing fuck­ing there”) be­fore be­ing re­vived by one of the only para­medic crews in New South Wales with a de­fib­ril­la­tor (they hap­pened to be pass­ing). The pa­tient then paid for every am­bu­lance in the state to be fit­ted out the same way. There was the time he heard a Texas mil­lion­aire brag­ging about his wealth in a high-rollers’ room, and said, “I’ll flip you for it.” The visit to Ve­gas where he paid off a wait­ress’ mort­gage. What story does, or could, de­fine his son in the same way?

Sig­nif­i­cantly, the tale told most of­ten about James is re­ally a story about Kerry. It’s the story about the bowl­ing ma­chine – in fact, a base­ball pitch­ing ma­chine – in­stalled in the Packer gar­den. Kerry would in­sist it was set to the max­i­mum pace, 190 kilo­me­tres an hour, for him and for James. Even the Test crick­eter Clive Lloyd re­fused to face it, but James would.

That image seems last­ing, the teenaged James fend­ing off skid­ding de­liv­er­ies, a cricket-flavoured short­hand for hard par­ent­ing, a dif­fer­ent kind of six of the best. But the rest of his story is more frag­men­tary: his break­down, his in­ter­est in Scien­tol­ogy (L Ron Hub­bard’s state­ments about the ills of gam­bling may have helped to cool his ar­dour), a se­ries of failed mar­riages and en­gage­ments to mod­els and pop stars, and a pub­lic punch-up with his best friend and for­mer best man, David Gyn­gell. He has not led a colour­less

life, but it has of­ten seemed to be the wrong colour. In a 2013 tele­vi­sion in­ter­view with Mike Wille­see, he said that “it sounds very self-in­dul­gent when a rich man talks about the search for hap­pi­ness”, and cried sev­eral times while talk­ing about his fa­ther and his low­est mo­ments.

Wille­see steered clear of re­li­gion, and whether or not James Packer has made a slow re­turn to Scien­tol­ogy is an open ques­tion. The Daily Mail ran the head­line ‘Scien­tol­ogy wrecked my en­gage­ment says Mariah’, cit­ing claims that for­mer Church spokesper­son Tommy Davis had fouled their re­la­tion­ship. In Fe­bru­ary last year Packer em­ployed Davis as his gen­eral man­ager in North Amer­ica for Con­sol­i­dated Press Hold­ings. There is an ecosys­tem of web­sites chron­i­cling the move­ments of for­mer Scien­tol­o­gists, and spec­u­la­tion ranges from Davis hav­ing him­self left the Church to a deep cover op­er­a­tion aimed at bring­ing Packer back into the fold.

There are other ex­pla­na­tions for the break­down in the Carey re­la­tion­ship as well. It was an un­usual match, and friends and fam­ily were some­times said to find it un­com­fort­able. There were re­ports that Packer’s mother, Ros, tried and failed to find com­mon ground. Leaks by Carey’s “camp” to TMZ blame the break­down on an un­speak­able in­ci­dent in­volv­ing one of the singer’s un­der­lings on a Greek yacht. Mean­while, Packer was said to be al­ler­gic to the prospect of ap­pear­ing on Carey’s re­al­ity show, Mariah’s World. He ap­pears in the first episode, clink­ing a cham­pagne glass, a ges­ture he per­forms with the ease of a man be­ing handed a bad X-ray in an on­col­o­gist’s of­fice.

He can hardly be blamed for treat­ing the pub­lic­ity in this way. When news of the break-up ap­peared on the web­site of Woman’s Day, it was ac­com­pa­nied by a cruel so­cial me­dia met­ric: “169 peo­ple laughed”.

Mean­while, Packer has re­turned to the board of Crown af­ter stepping down just 17 months ago. He will drive the Baranga­roo project, pos­si­ble on­line ven­tures and the at­tempts to res­cue his im­pris­oned em­ploy­ees. John Alexan­der, a for­mer PBL and Fair­fax ex­ec­u­tive and long-time Packer fam­ily con­fi­dant, will over­see cost-cut­ting.

“I think I’m a psy­chol­o­gist’s wet dream – who knows why the mind does what the mind does?” Packer told John Lehmann in a 2013 in­ter­view. What­ever is driv­ing Packer’s peri­patetic am­bi­tion, it has not shown signs of en­er­va­tion as he turns 50. He spends up to 1200 hours on a plane a year, and con­stantly moves between Los Angeles, Tel Aviv and wher­ever he is do­ing busi­ness. There will be plenty of busi­ness to do in Syd­ney, where the project will con­tinue, Chi­nese high rollers or not. There is the sug­ges­tion that the tower may be turned into apart­ments in­stead, if the VIPs are de­tained else­where. The mind of a ty­coon may be a mys­tery, but the ways in which money and power op­er­ate are by now well un­der­stood.

Justin Chin / Bloomberg via Getty Im­ages

James Packer at Stu­dio City Ma­cau.

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