Australian casino operator Star Entertainment Group has pledged to significantly increase its investment in the Gold Coast tourism industry in return for an exclusive casino license.
During an annual general meeting on Thursday last week, Star Entertainment Group chairman expressed dissatisfaction over the government’s continued consideration of a second casino license on the Gold Coast – a process which, over the last seven years has “yielded nothing but considerable cost – tens of millions of dollars… weighing on share price,” according to O’Neill.
“The Star’s position has always been – we support investment in tourism assets on the Gold Coast – but the Gold Coast market is too small for two casinos,” he said.
O’Neill said he hopes to break the 7-year deadlock with the Queensland government, by offering a solution that will “result in the delivery of investment in tourism and jobs in Gold Coast,” in return for “certainty around maintaining the Gold Coast as a one casino city – just like Brisbane.”
This will involve three top line elements, including investment of up to $100 million for the expansion and upgrade of the Gold Coast Convention Centre, refreshment of the Sheraton Grand Mirage beachfront resort with “new tourism experiences” as well as a $2 billion dollar-plus Masterplan for The Star Gold Coast, which includes the construction of five hotel towers along side The Star Grand and The Darling, and new F&B offerings and retail outlets.
However, O’Neill stressed that these elements would require exclusivity arrangements with the government.
Queens Wharf update
Turning to the Queen’s Wharf Brisbane development, Star Entertainment Group managing director and CEO Matt Bekier said that the project is on time and on budget, and remains scheduled to open in 2022.
Demolition and excavation work is complete and structural work is underway.
Decision soon on Ritz Carlton
Regarding developments in NSW, O’Neill said they expect the Independent Planning Commission to announce its decision on its tower proposal at The Star Sydney over the next few weeks.
He noted that attempts to boost tourism through the construction of a Ritz Carlton Hotel and apartments was met with a “disappointing recommendation to reject from the Department of Planning.”
The 2019 financial year saw mixed results for the Star Entertainment Group, which reported a statutory net profit after tax of A$198 million, up 33.7 percent year-on-year in FY19.
Bekier said that they saw a challenging second half of the financial year, impacted by domestic consumer sentiment and global economic softening.
However, he noted that domestic gaming results were strong across both slots and tables in Goast Coast, Brisbane and Sydney.
The international VIP rebate business produced mixed results however, with visitation up but revenue down more than 30 percent in the year.
Bekier however remains optimistic over the long-term.
“When macro market conditions improve, we are confident this ongoing increase in unique patrons and our diversification into new geographies and customer segments will drive a return to earnings growth from this business.”