Could Queensland Become the Next Major Gambling Hub for Asian High Rollers?

Located in the northeastern part of Australia, Queensland is the continent’s second largest state, spreading over 1,722,000 km2 of land. In terms of population, it is the third most populous one with 4.5 million inhabitants, according to the 2011 census.

Enclosed by the Coral Sea in the north and the South Pacific Ocean in the east and fringed by the Great Barrier Reef for over 2,000 kilometers, Queensland is definitely a place that has a lot to offer to both domestic and foreign tourists. Bearing this in mind as well as its mild climate and a number of other important factors, it is not a surprise that the state has gradually turned into quite a popular tourist destination.

And it seems that visitors from Mainland China find Queensland and Australia as a whole a particularly attractive place to travel to. They appear to be the fastest growing tourism market in Australia. According to information released earlier this year, a total of 918,000 Chinese visited the continent last year, up 21.7% compared to the figures posted for 2013.

In addition, they are also the biggest spenders among the foreign tourists. Last year, visitors from Mainland China spent a total of A$5.7 billion while on the continent, up 19% year-on-year. And this uptrend is expected to continue. As for Queensland, it was visited by 330,000 Mainland China tourists last year. And they spent about A$600 million while within the state’s borders.

Without the slightest exaggeration, one thing could be said about the Chinese and tourists from the Asia-Pacific region as a whole – they enjoy comfort. They like to be pampered and offered a wide variety of accommodation, entertainment, retail, and food and beverage options while abroad. In addition, they are known for being frequent visitors to casinos and finding gambling activities particularly enjoyable.

In fact, Asian high rollers have long been among the most desired gambling customers and revenues generated from them have accounted for a significant portion of the proceeds collected by casino companies.

With all that said, it is not a surprise that the former Queensland government decided to take important measures towards turning the state into a popular gambling hub and why not the next Asian-Pacific gambling mecca. In 2013, Premier Campbell Newman announced that Queensland was to have up to three new casinos, which were to be part of bigger integrated resorts, in an attempt for more tourists to be attracted and the local economy to receive a major boost.

First Steps towards the Launch of the New Queensland Casino Resorts

Queensland has always relied heavily on its tourism industry. According to the latest information released by the state government, it annually generates more than A$17.5 billion and employs more than 220,000 Queenslanders directly or indirectly.

After a scheduled 16-day trade mission around Asian countries, including Mainland China, Macau, and Singapore, as well as series of discussions with Cabinet members, former Premier Newman announced on October 14, 2013 that an invitation for expressions of interest for the redevelopment of the government-owned precinct in the Brisbane Central Business District (CBD) would be issued by the year’s end.

Premier Newman explained that the redevelopment would include the construction of six-star hotels and the addition of retail, food and beverage, and entertainment facilities as well as open spaces. In addition, it was announced that a casino license for the so-called Queen’s Wharf precinct was to be awarded. It was explicitly stated that the license in question was not to be granted for the establishment of a stand-alone casino but rather for an integrated resort.

Based on what he had seen in popular gambling hubs such as Macau and Singapore, Premier Newman pointed out that the launch of mega casino resorts was what Queensland and its tourism industry needed. Such resorts were expected to attract Asian high rollers, who as it became clear, tended to spend a lot of money on casino gambling.

Apart from the Queen’s Wharf integrated resort project, the state government noted back in 2013 that two more casino licenses would be granted. Those two were to be awarded to developers that expressed interest in building mega-casino resorts in other parts of Queensland.

At that time, local media suggested that Australian gambling operators Echo Entertainment and Crown Resorts would be the two competitors for the Brisbane project. In addition, a casino resort on the Gold Coast Broadwater was contemplated, with China-based ASF Consortium being the possible developer behind that particular project.

Expression of Interest Invitation and Further Discussions on the Matter

An invitation for Expression of Interest was eventually issued on December 19, 2013. Back then, the Queensland government noted that it would grant casino licenses only to developers and projects that promised to benefit local communities and the state economy as a whole. The Expression of Interest process was launched on January 17, 2014 and ran through March 31, 2014.

As of April 2014, there were a total of 12 proposals for the construction of three integrated resorts across the state. Of those, 6 developers were shortlisted for the redevelopment of the Brisbane CBD into the Queen’s Wharf precinct, affectionately named so to celebrate the area’s rich past. Three of the preferred candidates were Australian companies – Echo Entertainment, Crown Resorts, and Lend Lease. The other three were SKYCITY Entertainment Group Ltd, Far East Consortium/Chow Tai Fook Enterprises Ltd., and Greenland Investment Pty Ltd.

And as mentioned above, 6 other developers expressed interest in launching integrated resorts in other parts of the state. And here are the interested parties themselves as well as their proposed locations:

  • Aquis at the Great Barrier Reef Pty Ltd. – Yorkeys Knob, not far from Cairns
  • ASF Consortium Pty Ltd. – Broadwater, Gold Coast
  • Fullshare International (Australia) Pty Ltd – south of Proserpine
  • China-Australia Entrepreneurs Consortium Pty Ltd – Airlie Beach
  • GKI Resort Pty Ltd – Great Keppel Island (boutique casino)
  • Eastern Success Group Pty Ltd – Nerang, Gold Coast

All interested developers paid a A$100,000 non-refundable fee in order to have their proposals considered by the Queensland government. At that time, no further information was revealed about the proposed plans for the development of integrated resorts across Queensland.

Over the past next months, the candidates for the Brisbane project were reduced to only two – Echo Entertainment and Crown Resorts. What is more, ASF Consortium’s Broadwater proposal and Aquis’ Yorkeys Knob were named the preferred bidders for the other two casino licenses. As of the summer of 2014, the latter projects were in a pre-planning phase and were waiting for a number of approvals before being able to proceed with the construction of the luxury properties.

And in order to obtain those approvals, the two developers were expected to submit comprehensive plans for the future mega-casino complexes, assessments of the potential impact those might have on the environment, as well as permits from host councils.

The other four regional proposals for integrated resorts were rejected as developers behind those were in the early stages of planning and negotiating. In addition, the Queensland government explained that the Broadwater and Yorkeys Knob projects were selected due to their close proximity to international airports and already established tourism locations. In other words, they were more likely to attract both domestic and international tourists, particularly high rollers from Mainland China.

Advantages and Disadvantages of the Future Queensland Integrated Resorts

Generally speaking, the announcement about the launch of three new integrated resort within Queensland’s borders and the benefits from those was welcomed by residents of the state. However, there was certain opposition among members of the preferred host communities. Some voiced concerns that developments of this kind might have a negative impact on the local environment. Others pointed to the probable increase in the number of gambling customers with problem behavior gaming behavior. Traffic and general infrastructure issues were also cited as reasons why such properties could be considered detrimental to communities that are to host them.

However, there is one thing that cannot be denied. The construction of new gambling properties will increase revenue generated from casino games considerably. No casino has opened doors in Australia since 1996, when the Reef Hotel Casino in Cairns was launched. And it seems that there will be at least four such properties to be launched within the next decade.

Not long ago, Crown Resorts was named the preferred developer for the construction of a A$1.3-billion hotel and VIP casino complex at Sydney’s Barangaroo waterfront. The operator now has to obtain a wide number of permits in order to be granted the license by 2019. As for the Gold Coast and Cairns integrated resorts, they may be operational by 2018-19. And last but not least, construction work on Echo Entertainment’s Queen’s Wharf property is expected to commence in 2017. If everything goes as planned, the mega-casino complex will be launched in 2022.

Earlier this year, Spencer Little, senior industry analyst at market researcher IBISWorld, noted that the number of Asian high rollers gambling at Australia’s casinos will increase significantly and this will result in gaming revenue reaching A$6.2 billion by the decade’s end. Commenting on the upcoming openings of integrated resorts in Queensland and Sydney, the analyst pointed out that this is indicative of “strength in an industry” that is already benefiting from higher levels of domestic spending and is to be additionally bolstered by foreign gambling customers from the Asia-Pacific region.

With the Queensland state election held on January 31, 2015, discussions over the three casino licenses stalled for a while. And once elected, it was up to Premier Annastacia Palaszczuk and her Labor government to decide which one of the two proposed Brisbane integrated resort projects was to be awarded the sole license as well as to renew talks about the other two complexes.

Eventually, it was announced on July 20 that Echo Entertainment together with Hong Kong-based entities Far East Consortium and Chow Tai Fook Enterprises will re-develop the Brisbane Central Business District into the luxury Queen’s Wharf precinct.

And here is a bit more information about what Echo Entertainment’s proposal includes as well as the ones for the Gold Coast and the Cairns hotel, casino, and entertainment resorts.

Queen’s Wharf Brisbane

As all three proposed project, the Queen’s Wharf one will aim at attracting Asian high rollers, particularly ones from Mainland China. This is why the property will feature a large casino floor with a number of gambling options. In addition to this, visitors will be given the chance to stay at a total of 1,100 hotel rooms. Those will operate under five popular brands, all new to Brisbane.

An iconic Arc building with a Sky Deck, which will feature restaurants and bars, will be among the resort’s highlights. Apart from the food and beverage options, the complex will also offer a number of entertainment ones, such as a light and water river show. Event space with capacity of 60,000 people will, too, be among the facilities included in the new precinct.

Echo Entertainment has also promised that there will be a residential area with up to 2,000 apartments, public parklands, and sports amenities. And these are only several of the numerous features the integrated resort will include. It is expected to be completed and launched sometime in 2022.

The Queen’s Wharf development is to create about 2,000 construction jobs and more than 8,000 permanent ones, once the resort is fully operational. In addition, its opening is expected to result in the additional amount of A$1.69 billion in tourism proceeds and A$4 billion being contributed to the Gross State Product. Last but not least, it is to annually bring 1.39 million more tourists.

Gold Coast Integrated Resort Development

As mentioned above, the ASF Consortium, a partnering business between Australian and Chinese developers, was named the preferred candidate for the Gold Coast casino resort. It could be said that of all three projects, this one met the strongest opposition and created a lot of controversy.

At first, the luxury property was to be located on the Wavebreak Island and to include a cruise ship terminal. However, the state government rejected that initial plan earlier this year due to environmental concerns. Yet, the developer was given a second chance to present a new site and new plan for the construction of the integrated resort.

In August, a new site for the property was approved by the government. It seems that the ASF Consortium’s Gold Coast resort will be located on the Spit not far from the Sea World theme park. It will spread over a 5-hectare area. The developer was also given some time to prepare a new plan for the property. It is to be presented to government members sometime next year.

In other words, the design of the Gold Coast casino resort and the facilities it is to include are yet to be revealed. However, the developer has promised that “wellness and health of the Gold Coast” will be of the utmost importance.

The new site for the project was generally approved by local communities. Yet, it also gained new opponents. According to them, a development of this kind will have numerous social and environmental impacts.

Aquis Great Barrier Reef Resort

Developed by Hong Kong businessman Tony Fung and his company Aquis Australia, Aquis Great Barrier Reef Resort will probably be the most expensive of all three projects. The total amount of A$8.2 billion is expected to be spent on its construction. The property will be located not far from Cairns and its international airport and will spread over 340.6 hectares of land.

It will feature 8 luxury hotels managed by recognized brands. There will be more than 7,500 hotel rooms that will accommodate up to 12,000 guests. In addition to this, the resort will offer numerous gaming, entertainment, food and beverage, and retail options.

Aquis has promised that its development will contribute significantly to the state’s well-being. It is expected to create 3,750 construction jobs. Once fully operational, the resort will employ up to 20,000 people. In addition, it is to annually draw more than 1 million tourists to Cairns, which would result in millions of dollars being contributed to the state in tax revenue.

Conclusion

To sum up, Queensland has most definitely embarked on a long trip towards the establishment of three expensive mega-casino resorts. Only time will tell whether all three projects will be materialized and whether they will prove to be profitable enough. However, given the fact that developers are determined to provide their potential customers with comfort and wide variety of gaming and other entertainment options, the state may very well turn into the next gambling mecca for visitors from the Asia-Pacific region.

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