Inside Asian Gaming

August 2014 inside asian gaming 27 In Focus Zealand, with 715,300 arrivals last year, up 14.2% from 2012. Australia captured less than 4% of the estimated A$129 billion mainland tourists spent on overseas trips and many believe it can do better. “Australia is still perceived as someplace aspirational and exotic by Chinese tourists,” GamePlan Consulting founder Sudhir Kale, an expert in international casino marketing, says. Queensland attracted 297,000 Chinese visitors last year, including 259,000 holiday-makers, usually higher spenders, and garnered $604 million of Australia’s $3.55 billion in Chinese visitor expenditures. A Queensland tourism report projects that total expenditure by overnight visitors in the state will grow from $21.5 billion in 2012 to $30 billion in 2020. Nationally, Chinese visitors are expected to account for one-third of expenditure growth. For Queensland that math indicates $2.85 billion in additional Chinese visitor spending. Yet, there are some knowledgeable Australian gaming hands who doubt the proposed IRs will get beyond the drawing board outside Brisbane, where the casino license is intended to anchor the redevelopment of the central business district. “I just don’t see the numbers working,” Newpage Consulting principal David Green, a former Australian gaming regulator, says. “There just is not critical mass to support large-scale investment.” “One has to be careful not to be blinded by the IR mirage so they don’t end up like the Ho Tram property in Vietnam,” says Ovion Partners Managing Director Peter Klugsberger, a Sydney- based consultant who worked as an executive at Marina Bay Sands in Singapore. “They also believed the ‘Build it and they will come’ slogan, and so far nobody came.” The government, however, is confident IRs can work the same magic they’ve worked in Singapore. “The IR in Singapore is viewed globally as an exemplar development,” the Department of State Development says. “IR development within Queensland will complement the state’s natural attractions within the globally competitive tourism market.” But Mr Klugsberger says, “For a casino operator to be successful in applying the Singapore lessons it needs to have: a) a strong casino brand; and b) a global network of operations that allow them to shuffle players around—losing VIP players love to change venues after a bad loss. One company that does this extremely well is Crown.” Mr Green, who advised the Singapore government on gaming regulation, also wonders about the comparisons. “Queensland will not be another Singapore,” he says. “In terms of international visitors, I believe there are less than 3 million per annum going to Queensland. [For the year ended in March, Queensland totaled just over 2 million overseas visitors; domestic holiday-makers in the state exceeded 7.5 million.] Most tourism is domestic, and every Australian state and territory has at least one casino and, with the exception of Western Australia, large numbers of community-distributed EGMs.” Queensland has 44,753 EGMs in 1,270 locations at latest count, many of them clubs run by community organizations such as veterans groups. Mr Green says the clubs put casinos at “at a serious distributional disadvantage.”