The Managing Director and CEO of Australia’s Star Entertainment Group has warned of a tough road ahead for the nation’s VIP operators when it comes to the lucrative VIP segment, with lingering uncertainty over China’s trade issues with the United States impacting high roller spend.
Speaking exclusively to Inside Asian Gaming, Matt Bekier, who estimated in early June that VIP turnover for the first half of 2019 was down by around 30%, said those trends had continued into the second half of the year.
“The pattern behind that is strong arrivals but much less risk taking than in the past, so they don’t turn over as much as they have,” Bekier said. “These are very large players who are entrepreneurs and if they’re not certain how competitive their products are going to be from a tax point of view then they are not going to take as many risks with their spare cash.
“Those trends continue to persist and as long as there is uncertainty around China’s trade arrangements with the US, that’s not going to turn around.”
Despite the downturn, Matt Bekier said the long-term prospects for both Star Entertainment Group – which operates The Star Sydney and The Star Gold Coast and is in the midst of its AU$3.6 billion Queen’s Wharf development in Brisbane – and for rival Crown Resorts were enticing.
“I think that Crown opening here in Sydney will make destination Sydney even more attractive,” he said in reference to Crown’s AU$2.2 billion Crown Sydney, due to open in 2021. “I think the whole east coast – Sydney, Gold Coast, Brisbane – will become very, very attractive for VIPs because you will have multiple high-end destinations in very close proximity and independent lines of credit.”
Bekier added that the key to Australia’s long-term VIP success revolved around the nation’s unique appeal as a destination.
“If that’s how the properties position themselves where they say, ‘You can do stuff here that is truly authentic’ then absolutely we can grow VIP market share,” he said.
“We just need to build out the experiences and a lot of the work that we’re putting into Queen’s Wharf is about creating those experiences.
“If we’re only competing on gaming it’s a hard destination because we’re a long way away, you need to get a visa and our AML and CTF requirements are pretty robust. You probably wouldn’t have the same questions asked to go to Cambodia or the Philippines, so we need more than just gambling to be competitive.”