Queensland Government Nixes Second Casino Plan, But No Exclusivity for Star

Posted on: July 12, 2020, 05:48h. 

Last updated on: July 13, 2020, 03:21h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

The Queensland government is scrapping plans to bring a second gaming venue to Australia’s Gold Coast. But it’s not granting exclusivity to Star Entertainment Group, either.

No Exclusivity For Star Casino
The Star Casino on Australia’s Gold Coast. Politicians won’t give Star the exclusivity it wants, but they’re scrapping plans for a second casino. (Image: Twitter)

State Development Minister Kate Jones said policymakers worked diligently with Star, the established operator in Southeast Queensland. But it became difficult to grant the 30-year exclusivity accord the gaming company has long sought.

Through the exclusive negotiation process for a Gold Coast Global Tourism Hub, we worked really hard to extract value from The Star. But the deal on the table did not stack up for taxpayers,” said Jones. “We were not able to reach consensus around the terms for long-term casino license exclusivity.”

The firm, which runs the Star Gold Coast, previously wielded plans to enhance the Gold Coast Convention and Exhibition Centre and the Sheraton Grand Mirage, among other spending proposals, in an effort to leverage a 30-year monopoly out of Queensland government with company executives claiming that market can’t support multiple casinos.

Still Committed

In official terms, Star Entertainment didn’t get the 30-year monopoly accord it craves. But its status as the Gold Coast’s lone gaming operator will remain intact for some time because Jones gave no indication as to when the second casino idea could be revived, or if it even will be.

Star Chairman John O’Neill said his company will move ahead with plans to spend $1.38 billion in the region — if the conditions are to the operator’s liking — as part of a plan to bring tourists to the area.

“We have confidence in the future of tourism and, under the right conditions, will continue to invest through our $2 billion-plus Gold Coast master plan that will help government deliver further significant economic benefits for Queensland, including thousands of jobs,” he said.

Star and Annastacia Palaszczuk’s government had been at odds for months regarding the operator’s three-decade monopoly request, with the two sides previously hoping to come to terms by last Christmas, only to see that timeline pushed out to early 2020. For his part, O’Neill says Star is already proving its commitment to Queensland.

“Investments in Queen’s Wharf Brisbane, alongside those on the Gold Coast where we’ve refurbished The Star Grand hotel, opened The Darling hotel, and have the Dorsett hotel and apartments tower under construction, are proof of our commitment to creating world-class tourism and entertainment destinations that will bring more than a million additional visitors to Queensland every year,” he said.

Market Conditions Dictated Second Casino Call

Some operators are moving ahead with capital spending plans in the Asia-Pacific region. But deteriorating market conditions caused by the coronavirus pandemic could make expansion via new construction unappealing for some cash-strapped gaming firms.

“Global market conditions are clearly impacting investment at present, and I can confirm that this government has no intention of reviving the market process for a new integrated resort – including a second casino – on the Gold Coast,” said Jones.

Last year, Caesars Entertainment Corp. (NASDAQ:CZR) dropped out of contention for the second Gold Coast casino after Eldorado Resorts, Inc. (NASDAQ:ERI) announced a $17.3 billion takeover bid for that company.

It was also rumored that Galaxy Entertainment, Hard Rock International, and Melco Resorts & Entertainment were among the parties interest in the Aussie venture.