AUSTRALIA

Queensland shines in dull market

Queensland continues to attract international investor interest in its casino market and is expected to see progress in new licenses being issued this year, though sentiment towards the market as a whole is lacklustre amidst flat revenue and rising regulatory pressure.

Plans to develop a global tourism hub, including a casino, in the town of Cairns have moved a step closer, with the project proceeding to the public consultation stage. The favored spot for the tourism hub is at the Cairns City Port precinct, noted Tourism Industry Development Minister Kate Jones.

However, she said that while the project is an exciting proposition for the region, the government would not proceed without feedback from locals.

“We’ve seen the benefits of the $3 billion Queen’s Wharf Brisbane project and a global tourism hub in Cairns would deliver much needed tourism infrastructure for North Queensland,” she said.

The project is expected to include six-star hotels, apartment towers and luxury retail. It will also consider options for a casino. This may involve the expansion of the nearby Reef Hotel Casino, or a new project.

Further down the coast, development continues to transform the city center of Maroochydore on the Sunshine Coast. The 53-hectare greenfield site is being turned into a business hub, which will also include a premium hotel, entertainment and MICE facilities and potentially a casino.

The Sunshine Coast has doubled its regional economy over the past decade to A$16 billion and has established strong links with the Asia Pacific and Middle Eastern regions.

Local developer SunCentral CEO John Knaggs told local media the company has received interest from multiple companies since it requested Expressions of Interest for the project.

According to local media, Hong Konglisted NagaCorp, the operator of Cambodia’s biggest casino, recently scouted out the site, sending a high-level delegation of executives, including Chairman Timothy McNally and global architects Steelman Partners, for a fly-in-fly-out site inspection.

Global Market Advisors partner Andrew Klebanow predicts two new licenses will be issued in Queensland this year.

“The current casino-hotel offerings have grown tired and the government recognizes that nothing stimulates capital investment from existing operators more effectively than new competition,” he said. “Queensland offers major casino operators a robust regulatory environment, a fair tax rate, and great airlift into a number of cities, which is appealing to travelers from Asian countries, particularly China.”

However, any new projects are likely to be far less ambitious than the multi-billion dollar propositions that came from Tony Fung’s Aquis Group and the ASF Consortium in the first round of bidding. Those A$8 billion plus investments were criticized at the time for being too large for the market to support and the crash in the VIP market following the arrest of Crown Resorts employees in 2016 further soured investor appetite.

Local spending has been lacklustre and Australia has also seen rising anti-gambling sentiment.

Recently released figures for the 2015/2016 fiscal year show total gambling expenditure rose 3.9 percent, though the strongest growth was recorded in the sports betting sector, with a gain of 13 percent. Expenditure in casinos was flat, edging ahead just 0.4 percent. Pokies fared better, with spending on machines in pubs and clubs up 4.2 percent.

“The domestic market has plateaued, and business from China is expected to decline,” according to 2018 predictions from GamePlan Consultants’ founder Sudhir Kale “While high investments in facilities are expected to continue on the part of Crown and Star, it is doubtful whether these investments will pay off like they did in the past. To muddy the waters further, there exists little appetite among politicians to support gambling in Australia.”

The Liberal National Party has already vowed to oppose the inclusion of a casino in the Maroochydore project and LNP MP Andrew Wallace has started a petition to encourage residents to reject the plan.

Crown Resorts is pushing ahead with its domestic investment program, though has been selling off assets worldwide to reduce its debt. It recently finalized the sale of its interest in Alon Las Vegas for $300 million and said it will offload its shares in Caesars Entertainment Corp, which are worth about $54 million.

The operator has also agreed to sell part of its interest in Ellerston, a private golf course in the Hunter Valley meant for its VIP customers, for A$62.5 million and agreed in-principle to sell two floors of the Crown Sydney Residences at the Crown Sydney Hotel Resort to James Packer for A$60 million, which has been approved by Crown’s independent directors.

Finally, Crown also reaffirmed that it is in discussions with the CrownBet management team for a potential sale of Crown’s 62 percent interest in CrownBet, together with any loans advanced by Crown to CrownBet for A$150 million.

Liberal Party pledges to keep pokies alive

The Tasmanian Liberal Party has promised to keep pokies in Tasmanian pubs and clubs if it is returned to power in the upcoming March election, countering a pledge by the Tasmanian Labor Party that it will remove the machines from noncasino venues by 2023 if it’s victorious in the poll.

“We respect the fact that gaming and gambling is a lawful activity,” Premier Will Hodgman said. “‘We fundamentally believe that Tasmanians should be able to exercise choice and to participate in gambling activities in its various forms. We are not a government or political party that believes in dictating to people.”

The government also reiterated its plan to break a monopoly held on electronic gaming machines by Federal Group.

Tabcorp shutters Luxbet

Tabcorp is planning to close online bookmaker Luxbet following its $11 billion merger with Tatts Group. Customers were told that bets would no longer be taken after Dec. 22.

“In August, Tabcorp Holdings Limited (Tabcorp) announced it was undertaking a strategic review of its Luxbet business,” media cited the company as saying.

“The review has determined that Luxbet is no longer aligned with the long-term strategic interests of Tabcorp and as a result, Luxbet will be closed.”

Account holders were given until Jan. 19 to withdraw funds in their accounts.