The Star Entertainment Group and the Queensland government signed earlier today the final contract for the development of an integrated casino resort in the Queen’s Wharf precinct in Brisbane. Under the terms of the agreement, the hotel and casino operator would pay the state the amount of A$272 million for being granted the right to build the property.
The two parties released certain financial details after the deal’s closure. The Star would contribute A$880 million in gaming taxes to Queensland over the first decade of operation. The operator, which recently rebranded from Echo Entertainment Group, will be working together with Asian partners Chow Tai Fook and Far East Consortium on the construction of the A$3 billion integrated resort.
The Star told media that it would pay A$1 billion in project costs and would fund those through free cash flow and existing debt facilities. The gaming and hospitality company also added that the deal with the state government secured it with a 25-year exclusivity period for the operation of an integrated resort within 60km from the Brisbane Central Business District. The exclusivity will be effective as of the first day of the new resort’s operations.
Work on the project is expected to commence in 2017 and the multi-billion-dollar complex is slated to be completed and launched in 2022. Its construction is expected to create 2,000 temporary jobs. Once fully operational, the integrated resort would employ more than 8,000 people.
Under the terms of today’s deal, the Queen’s Wharf casino will feature up to 2,500 poker machines. Those are to be taxed at 30%. In addition, gaming tables will be taxed at 20% and the rebate program – at 10%.
Commenting on the agreement, John O’Neil, Chairman of The Star, said that the Queensland government has driven “a hard bargain” throughout negotiations but they are happy with the outcome. Mr. O’Neil also described the Queen’s Wharf development as a “colossal” one that would annually drive an additional of 1.4 million foreign tourists, particularly Chinese ones.
Queensland Premier Annastacia Palaszczuk confirmed that with the contractual close, they will be able to proceed with the necessary legislative and casino license changes. Ms. Palaszczuk also pointed out that they aim at “a complete transformation of the area” as this would be good both for local tourism and for jobs.
As part of the deal with the Queensland government, The Star is planning to move its headquarters to Brisbane.
