Packer loses $20 mn in gambling; Casino's share zooms

Packer loses $20 mn in gambling; Casino's share zooms
REUTERS

LOS ANGELES, Sept 6: One famous man's reported huge losses at the gaming tables of Las Vegas are giving an unexpected boost to shareholders of casino giant MGM Mirage, analysts said Tuesday.

MGM Mirage isn't talking, but reports that Australia's richest man, media tycoon Kerry Packer, supposedly lost $20 million (around Rs 90 crore) while gambling at the company's ritzy Bellagio resort/casino in July had some Wall Street analysts crowing that MGM Mirage has hit the jackpot.

Packer's gambling spree has provoked a heated debate in Australia -- with some politicians saying that if Packer has so much money to blow on gambling, he ought to pay more taxes. The nation's Prime Minister defended the tycoon, saying it was his money to do with as he sees fit. Packer has admitted losses -- but said they were far less than the $20 million newspapers claim he bet away.

Whatever the truth, investors appear to be bullish on MGM Mirage stock in recent days. The company's shares rose $1-7/16 to close at $35-11/16 on Tuesday, and are trading near their 52-week high of $36-5/8.

PaineWebber analyst Robin Farley said the reports, if true, could provide a boost for MGM Mirage. "We estimate that this large win for the (Bellagio) could add $0.05-$0.07 to MGM Mirage's (third-quarter earnings per share), although we back out (disregard) abnormal table luck (good or bad) when analysing gaming company results," she wrote.

Despite the windfall, Farley said she is holding back from revising her earnings estimates. "I'm not going to run out and change numbers," she said. "They may have lost a ton to someone who came in two weeks later."

Jeffrey Logsdon of WR Hambrect & Co said he recently upped his third-quarter earnings estimates for MGM Mirage to 38 cents a share from 32 cents. "That was based on the win percentage at the property, the win percentage in the high-end business and the high demand for rooms," he said.

Logsdon said he was aware of the news involving Packer, but declined to cite the media mogul's reported losses as the reason for raising his estimate.

The 62-year-old Packer, known as Australia's richest man and one of the world's biggest gamblers, called the reports that he lost $20 million "absolutely ridiculous."

He told an Australian newspaper the figure was "blown out of proportion," and said "the amounts of money spoken about are nowhere near the true figures."

Regardless, the $20 million would be a pittance to Packer, who had an estimated net worth of $4.7 billion in 1999, according to Australia's Business Review Weekly magazine.