Will Queensland Casino Resorts Attract Enough Gamblers From China to Be Successful?

Queensland is planning to erect three large casino resorts in the state already giving out licenses.

Australian state of Queensland is best known for the Great Barrier Reef, surfing paradise, and lots of sun throughout the year. However, the state government is now looking to make waves outside the ocean. There are growing plans to jump onto the Asian gambling market by introducing casino resorts within the state to operate under Australian gambling laws.

The state Premier, Campbell Newman, is preparing for a tough reelection campaign and regards the push for gambling resorts as a crucial slogan. The casinos, or three multi-billion dollar integrated resorts to be exact, are widely seen as a quick cure for Queensland’s unemployment, economic, and tax revenue woes.

Gambling in Queensland

Australian Queensland state is planning to build three large casino resorts

• The licenses for casinos have already been granted under Australian gambling laws

• The resorts are planned for Brisbane, Regional Queensland, and Gold Coast

• They will heavily rely on tourist gamblers from China

Putting online casinos in Australia aside for a moment, we will find that Queensland is already home to four gambling establishments, as well as 45,000 pokies in around 1,300 pubs, clubs, and hotels operated by community organizations.

Queensland state revenues have been pretty slim in recent years mainly due to lower demand for minerals, Queensland’s main export. Another important chapter or revenues, tourism, has been steadily falling due to the fact that Australians preferred to take their vacations abroad.

Looking over to Singapore and how much success the country is enjoying with their integrated resorts, Queensland officials naturally wish for their state to follow suit. They have already granted licenses for three new casinos: on the Gold Coast, in the northern part of the state called regional Queensland, and in Brisbane.

Who is bidding to build the new resorts

Just like any other country with casinos in Asian region, Queensland is largely counting on Chinese tourists to come and play at the new integrated resorts. The number of Chinese tourists has been growing in Australia and Queensland in particular, and all four or potential contenders for Queensland’s casino licenses have strong ties to China.

Brisbane

James Packer’s Crown Resorts is looking to win the Brisbane license, and hoping to build on their Sydney casino success. Crown Resorts will once again go against a smaller rival Echo, who are already running a casino in Brisbane, called Treasury. It’s adjacent to the planned site for the new integrated resort, but has landmark restrictions on any changes.

Back in June this year Echo was joined by another license bidder, a joint partnership of Far Eastern Consortium and Chow Tai Fook, controlled by a major Macau gambling scene player – Cheng Yu Tung. The billionaire already has a 10% stake in Stanley Ho’s gambling empire and has recently purchased a major share in Suncity Group, a Macau junket promoter.

With Cheng aligned, Echo have a link to mainland China high-rollers through the junket network, something they really need if they were to compete with Crown Resorts. However, James Packer’s company is particularly successful in going into the Asian gambling market with their flagship Melbourne resort.

Gold Coast

A provisional license has already been granted to ASF Group for the casino resort on Gold Coast. The Broadwater Marine integrated resort is estimated to have a $4.2 billion price tag and will include a marina and a cruise ship terminal. The Chinese investment company is working closely with two Chinese state-owned construction companies on the Gold Coast project.

Regional Queensland

As for the third casino resort, the state government has come to Tony Fung, a Hong Kong billionaire with great experience of building casinos on mainland China, Hong Kong, and Queensland. The $4 billion Aquis resort is planned to have 4,000 hotel rooms and a large casino floor.

The full integrated resort project there is estimated to have 7,500 hotel rooms, additional 1,000 luxury residences, and would cost a whopping $8 billion. Fung has already purchased the Reef Casino in Cairns. He commented in Australian gambling news: “Our goal is to introduce a whole new generation of Australian and international visitors to Cairns and far north Queensland and get them coming back for more.”

Opponents to casino resorts

Just like with any other big casino project, there are a number of opponents to Queensland plans. Former Marina Bay Sands gaming executive and now managing director of Ovion Partners consulting company, Peter Klugsberger says a large number of Chinese players is needed for the project to succeed.

He says: “I haven’t really heard what the business rationale of the bidders is to justify those levels of investment. Who are the target customers? Just to mention ‘Chinese tourists’ is a bit vague.”

Another opponent is former Australian state gaming regulator and now Newpage Consulting principal, David Green. He said: “Queensland tried many years ago to capitalize on Japanese tourism, which did not succeed to any marked extent. Note the politics of foreign ownership is still a dynamic that needs to be understood.”

Sudhir Kale, the founder of GamePlan consulting firm, has carried out a study of the south Queensland market for the state government. According to his findings based on 2012 figures and future projections for market grown, he says that there’s only room for “one large resort or two smaller ones.” Obviously not three major integrated resorts the government is planning to build.

Only time will tell if the Queensland state government or the opponents of the resorts were right. Asian gambling market is still growing and Australia jumping on the bandwagon to satisfy growing demand from Chinese players may still be a good idea.