Inside Asian Gaming

inside asian gaming August 2014 28 In Focus For IRs to succeed, Mr Green believes “That will require either an awful lot of imports or a much higher spend per patron, together with a reorientation to tables.” Queensland had an estimated $2 billion in gaming machine revenue last year across all venues but less than $300 million in casino table revenue. “To make such an investment work an operator needs to bring in: a) mountain loads of Chinese mass-market players; or b) high-end junkets,” Mr Klugsberger says. “What I am asking myself is: What is Brisbane’s and Gold Coast’s unique selling point? I would argue that nobody is quite sure.” ORGANIC GROWTH Mr Kale, a marketing professor at Gold Coast’s Bond University, carried out a study of southern Queensland for the government in advance of the IR offerings. The study projects sufficient organic demand in coming years for one additional casino on the scale of Crown Melbourne—500 tables and 2,500 machines—or two smaller ones. In the base-case scenario, without the introduction of IRs, the study forecast the casino gaming market will increase from last year’s estimated $530 million (the market was about $620 million at the time of the study in 2012) to $1.2 billion in 2016. This includes $120 million of international commission business, i.e. overseas VIPs, representing 17.5% of total GGR. In 2013, revenue from that segment was around $14 million, 2.5% of total GGR, and declined by 60% in the second half of the year. VIP win rates fell sharply, but turnover also dropped, by 30%, despite double-digit growth in Chinese visitor numbers. Fung Sway Hong Kong tycoon behind Aquis dreams big, starts small Billionaire Tony Fung’s A$8.15 billion Aquis at the Great Barrier Reef on Queensland’s northeastern coast would represent the largest tourism investment ever in Australia. The son of a Hong Kong real estate and brokerage legend who’s built extensive property holdings in Australia, mainland China and Hong Kong, Mr Fung has a reputation as a savvy dealmaker. “He has the connections and imagination for this kind of project,” GamePlan Consulting founder Sudhir Kale says. If Aquis goes forward as planned, 340 hectares of tropical farmland in Yorkeys Knob, a sleepy beachfront hamlet 13 kilometers north of Cairns, will be transformed with eight hotels containing 7,500 hotel rooms—nearly twice the rooms now available in the entire tropical north Queensland region—two theaters, convention space, luxury residences, retail shopping, a cultural center, an aquarium, a golf course and a sports stadium, plus a casino with 750 table games and 1,500 EGMs, the whole to be completed in two stages over 10 years around an artificial lake and reef lagoon. The $4.3 billion first phase, scheduled to open in 2018, would include 4,000 hotel rooms. “Tony Fung has been very forthright, [saying] we’re going to do it in phases, test the water,” Mr Kale says. Aquis would create 3,750 construction jobs at its peak and employ a workforce of 20,000 when fully operational. The state government has declared Aquis a “coordinated project,” streamlining its consideration on environmental and other regulatory issues. Queensland Premier Campbell Newman is driving the expansion strategy as his Liberal National Party government, swept into power in an unprecedented landslide in 2012, prepares to face voters by next June. Rendering of Aquis Great Barrier Reef Resort >>