Kerry Packer's $20 Million Loss to the MGM Grand

Let us examine one of the more notorious losses in casino history, and ask what it reveals about the man and the era.

Q: Who was Kerry Packer?

Kerry Francis Bullmore Packer, born December 17, 1937, was an Australian media magnate who controlled Publishing and Broadcasting Limited, owning Channel Nine and a substantial publishing empire. He was for many years the wealthiest man in Australia. He died on December 26, 2005. Throughout his life he was a prodigious gambler at the highest-limit tables in London, Las Vegas, and Australia, and his sessions at properties such as the MGM Grand, the Mirage, and Crockfords became legendary.

Q: When did the MGM Grand loss occur?

The most widely cited loss, in the range of US$20 million, is generally dated to 1999 or 2000. Reporting of the exact year varies, and Packer's sessions were frequent enough that several major losses and wins occurred within a narrow period. The MGM Grand's public filings for the relevant quarter, and broader coverage by the Las Vegas Review-Journal at the time, documented a material single-quarter impact on the casino's results attributable to high-roller losses. The attribution to Packer specifically was widely understood in the industry but not officially confirmed by the property.

Q: What games was Packer playing?

Packer's preferred games were blackjack and baccarat, with occasional excursions into other table games. His blackjack sessions are the more documented of the two. He typically played multiple hands simultaneously, with bets reaching and sometimes exceeding US$250,000 per hand. Over a long session, exposure to variance at this stake level is measured in millions.

It is worth asking what such a session actually looks like. Consider a player wagering US$250,000 on each of seven blackjack hands simultaneously. In a single round, that is US$1.75 million at risk. Over a hundred rounds, a typical long session, the theoretical loss, under basic strategy with thin house edge, is in the low hundreds of thousands. The actual variance can swing the result by many millions in either direction.

Q: Was this single session or accumulated play?

The US$20 million figure is generally attributed to a particular extended run rather than a single sitting, though within that run there were specific sessions with losses in the several-million-dollar range. Packer was known for long sessions of many hours, sometimes stretching over a visit of several days during which he might play intermittently.

Q: Did Packer win as often as he lost?

This is perhaps the most interesting question. The popular image of Packer is of a spectacular loser, but the record, such as it can be reconstructed, suggests substantial wins as well. Reports from Crockfords in London describe Packer winning as much as US$20 million to US$30 million in single trips during the 1990s. The losses are more publicly remembered because they moved casino earnings in a quarter that public companies had to report, while wins simply depressed those earnings without the same dramatic reporting.

One might observe that over a long career of high-variance play, the expected value to the house is the house edge times the total volume wagered. Packer's volume over his gambling life was enormous. The house's expected profit from him was therefore substantial. But the variance around that expectation was also enormous, and in any given year the house could win or lose significantly.

Q: Was Packer counting cards or using any advantage play?

By consistent account, no. Packer was a pure recreational high-stakes gambler, playing large because he could and because the action interested him. He did not employ counting teams or other advantage techniques. His edge, to the extent he had one, came from the comps and rebates that a player of his size could negotiate, but these were modest relative to the variance he absorbed.

Q: What does the episode reveal about the whale era?

One might observe that the late twentieth century represented a particular moment in casino history. A small number of ultra-high-net-worth individuals played at stakes that could move quarterly earnings. The casinos that catered to them built entire salons, staff, and comp programs around their preferences. Kerry Packer, the Sultan of Brunei, Adnan Khashoggi, and a handful of others were known by name in the pits of the major properties.

The era changed for several reasons. Macau opened in 2002 and absorbed much of the Asian high-end play that Las Vegas and London had previously shared. Anti-money-laundering regulations tightened globally after 2001, making certain kinds of high-end play more administratively difficult. And the cultural moment that produced the personality type of the 1990s whale, the self-made billionaire who enjoyed a night at the blackjack table as his principal recreation, gave way to a generation whose wealth was more financialized and whose leisure took different forms.

Q: Is the reported US$20 million figure accurate?

The figure is plausible and consistent with contemporaneous reporting, but it should be treated with the caution appropriate to any figure that was never officially confirmed by the casino or the gambler. The broader pattern, of which the figure is one element, is well-documented: Packer's play was at stakes where an individual session could produce outcomes in the millions, and over his career such outcomes occurred many times in both directions.

Q: What is the lasting lesson, if any?

Let us close with a reflection. One might ask what it was that Kerry Packer was actually buying when he wagered a quarter-million dollars on a hand of blackjack. He was not buying expected value; the mathematics of blackjack at any stake favor the house. He was buying something else.

Perhaps what he was buying was the sensation of significance within his own life. A man who has built a media empire, who has employed tens of thousands, who holds in his hands the public attention of a continent, finds himself at a blackjack table where the result of the next hand genuinely matters. Not because of the money, which is small relative to his wealth, but because the outcome is uncertain and his decision is his own. At the scale of his life, few things remained uncertain. The card table was one of the few.

This is a speculation, not a finding. But it may explain the whale of that era more fully than any account of variance or comp programs can. Packer did not need the money he won or lost. He needed, perhaps, the uncertainty itself. The MGM Grand, for whatever period in 1999 or 2000 it housed his losses, was merely a structure that could deliver that uncertainty at a scale he found worthwhile.