Macquarie Research analysts have poured cold water on the prospects for a second casino operator on Australia’s Gold Coast holiday strip, insisting the market isn’t big enough to support a second player.
The assessment by Macquarie’s David Fabris and Andy Chuk, reported in The Australian Financial Review, notes that the Gold Coast is not as attractive to a newcomer as some other locations around the country may be, with gaming revenues in the region totaling just AU$616 million in 2018 of which Star Entertainment Group’s The Star Gold Coast accounts for 45%.
“Given the market structure, a new competitor would be arguably challenged to expand the domestic market with an investment case most likely based on taking significant domestic market share from the incumbents,” Macquarie said.
Discussions around a second Gold Coast casino have been ongoing for a number of years now, most notably via a bid by Chinese-backed ASF Consortium to build an AU$3 billion IR complex. That bid was rejected by the government last year.
Instead, Star Entertainment Group recently announced that a new AU$2 billion masterplan to expand its current operations had been approved with the company looking to construct a total of five new hotel towers and a range of associated entertainment facilities.
The Australian Financial Review quoted a Star spokesman as stating that its position as the Gold Coast’s only casino operator remained unchallenged.
“We are informed by government there is no process under way,” the spokesman said.
“Our position is also well known. We are excited by the approval of our AU$2 billion-plus expanded masterplan for The Star Gold Coast.
“We have been consistent saying each stage of the masterplan will be dependent on the market and competitor landscape at the time.”