Tourism is a major source of revenue for the Australian state of Queensland, generating approximately A$4 billion per annum. But, at the same time, Queensland is also the most indebted state in Australia with debts amounting to A$45.8bn in 2014/15 (source: the Mid-Year Fiscal and Economic Review – MYFER).
No wonder that both previous and newly-elected governments eye casino sector expansion as a way to fill up state coffers and reduce the debt.
In November 2012 the Queensland Government released an Invitation for Expressions of Interest for the first new casino venue as part of the Broadwater Marine Project, north of Gold Coast. In July 2013 the Queensland Government released the Request for Detailed Proposals and two groups applied. In February 2014 ASF Consortium was chosen as a preferred developer.
In April 2015, however, the newly-elected Queensland Government suspended ASF’s plan for a resort on Wavebreak Island, citing strong opposition from environmental groups. The main issue at stake was the impact of a cruise ship terminal on the delicate marine environment. ASF was to present a new proposal to the Queensland Government in June 2015.
The second casino could be built in Brisbane. In mid-2013 the government announced it was evaluating building a casino at the site of the Executive and Public Works Building. Echo, which operates the Treasury Casino in Brisbane, immediately offered to relocate its casino to the new location. The company would build a larger integrated resort to attract VIP overseas gamblers, but it would also require exclusivity within the city. At the same time rival company Crown stated that Echo’s casino in Brisbane is poorly managed, so they should be awarded a casino licence. The two companies got into a heated public debate as they were simultaneously fighting for the Brisbane and Sydney casinos.
Interested companies were given a March 2014 deadline to submit Expressions of Interest. The following month Echo and Far East-Chow Tai Fook signed a Memorandum of Understanding to bid jointly for the casino licence. A month later Crown and Greenland Holding Group formed a partnership to counter the Echo/Far East-Chow Tai joint bid.
In late October 2014 both groups confirmed they had formally responded to the Request for Detailed Proposals, released by the Queensland Government. On 22 May 2015 both groups submitted their final bids. The Crown/Greenland consortium proposed to install between 1,500 and 2,500 new gaming machines, while the Echo/Far-East-Chow Tai consortium suggested moving 1,600 existing machines from the Treasury Casino to the new venue.
On 20 July 2015 Echo was chosen for a A$2 billion casino resort in Brisbane’s Queen’s Wharf precinct over Crown’s bid.
A third active casino proposal is for a second casino licence in Cairns. The proposal came from Hong Kong businessman Tony Fung, who proposed a A$8.15 billion Macau-style resort close to the Great Barrier Reef with two casinos and nine luxury hotels. The investor has secured a five-year option on 283 hectares of land at Yorkeys Knob, north of Cairns. The proposed Aquis Resort would target wealthy Chinese tourists and operate 750 tables and 1,500 machines. The project received first approval in August 2013, when it was accepted as a Coordinated Project.
In March 2014, the Aquis Resort reached an agreement with Reef Casino Trust to purchase the existing Reef Hotel Casino for A$276m, and was given permission to buy land for the planned resort.
The State Government announced in May 2014 that the Aquis Resort had early-stage government backing and would likely be granted a casino licence.
In August 2014 the Australian Competition and Consumer Commission (ACCC) said Aquis Resort would not create a monopoly in the market should they win a casino licence for a resort at Yorkeys Knob. The ACCC further clarified that the Reef Casino mostly attracts non-VIP domestic gamblers, while the potential Aquis Resort would attract international VIP gamblers.
In September 2014 the Foreign Investment Review Board approved Aquis’ takeover agreement of the Reef Casino. But soon the Office of Liquor and Gaming Regulation stated it will not be able to grant all regulatory approvals for the deal by 28 November, which was the expiry date for the Aquis’ offer, effectively sinking the takeover bid. Aquis later stated they might consider a new takeover bid.
Nevertheless, in December 2014 Aquis received environmental approval from the state’s Coordinator General for the Aquis Resort and in the same month acquired Casino Canberra in Australian Capital Territory. The acquisition of the casino venue was needed to enable Aquis to list itself on the Hong Kong stock exchange, in order to raise capital for the A$8.15 billion Aquis Resort.
In early May 2015 Aquis received environmental approval from the federal government. Aquis now needs to reach an agreement with the state government to develop the casino component of the project.
In September 2013 a fourth casino proposal was unveiled in the state as Sunshine Coast mayor was planning a redevelopment of Horton Park Golf Course. An interested investor, Clive Palmer, would like to build a major tourist facility on the beach, which would include a casino.
In March 2014, the China Australia Entrepreneurs Association Incorporated (CAEAI) submitted an Expression of Interest for a A$5 billion Buddhist temple and a casino resort at Airlie Beach. A month later Ridong Australia announced their plans to build a A$3 billion resort and casino in Nerang, on the Gold Coast. The only proposal of an island resort was made by Tower Holdings on Great Keppel Island. The resort would cost around A$2 billion.
Proposals for casinos at Nerang, Great Keppel Island and Airlie Beach were found unsuitable as they were not sufficiently near international airports, meaning they could not attract many international visitors, and because they were in early planning stages.
In May 2015, however, Tower Holdings announced it had received development approval from the Queensland Government for their proposed Great Keppel Island resort, but without the casino.
New hope for a casino was kindled in April 2015, when the Queensland Government suspended the aforementioned ASF’s proposal to build a casino resort at Wavebreak Island. Newly elected Queensland Premier Annastacia Palaszcuk said Tower Holdings may apply for a licence if ASF’s licence became available again.
On 1 May 2015, however, Deputy Premier Jackie Trad said the newly elected government was reluctant to award a casino licence, thus condemning the whole project, as international investors insisted on a casino venue as part of the project.
The last active proposal is by Fullshare, the new owner of the Laguna Quays resort, closed since early 2012. The resort initially had a gaming licence, but missed out on it by not building a casino. The new owners now hope they might be eligible for one of the new licences, but it seems unlikely as there are already three new casinos in the planning.
The newly-elected government is torn between filling the state’s coffers with additional casino revenue and numerous environmental groups that oppose new investments that could damage the pristine nature of the Queensland coast. There are also calls to reduce the availability of gambling establishments and implement better programs for problem gamblers. On the other hand operators are eager to secure their spot in the lucrative Sunshine State, as witnessed by the four active casino proposals. The government faces a difficult task to balance the issues of reducing the state deficit, gambling venue saturation and environmental threats.