POKIES APLENTY
Research: ‘More attractive markets for new casino’
A SECOND casino on the Gold Coast would cannibalise existing operators and struggle to be viable in a city “saturated” with gaming, independent research concludes.
With one poker machine for every 67 adults and gaming table for every 3862, new Macquarie Research found the Coast has higher concentrations than other “major casino cities”.
A SECOND casino on the Gold Coast would cannibalise existing operators and struggle to be viable in a city “saturated” with gaming, independent research concludes.
The Gold Coast has one of the highest concentrations of pokies and gaming tables to residents, outstripping Sydney, Melbourne and Brisbane, the new Macquarie Research says.
Its analysis of Gold Coast casino owner Star Entertainment Group and whether a competitor would be viable says: “We consider the Gold Coast gaming market to be one of the most competitive within Australia, given significant supply (or saturation).”
With one slot machine for every 67 adults and gaming table for every 3862, the Coast has higher concentrations than other “major casino cities”. Coasters, the second biggest spenders on gaming after Sydney, average $1277 a year.
“We argue there are more attractive markets in Australia,” Macquarie Research says.
It reveals the city gaming market, consisting of Star Gold Coast and 123 clubs and RSLs, generated $616 million in revenue for 2018’s financial year.
“A new competitor would be arguably challenged to expand the domestic market ... taking significant domestic market share from incumbents ... rather than tourism.”
Macquarie Research pours cold water on the viability of a second casino resort at the scale of Star Gold Coast’s $2 billion masterplan for Broadbeach.
“We struggle to present a scenario whereby an appropriate return could be generated on a new $2 billion integrated resort.”
A $2 billion competitor would need $300 million earnings a year, three times what Star Gold Coast – with 45 per cent of the market – generated last year.
Another hurdle was acquiring an estimated 500 slot machines off existing operators, Macquarie says, noting Tourism Minister Kate Jones has ruled out adding to the number of machines.
“A new integrated resort may be able to generate $60 million, taking into account significant market share losses by Star Gold Coast/local venues.”
On that basis, it suggested a $400 million resort could be possible. But the Queensland Government would need to assess the community benefit and determine if it deterred Star Gold Coast from going through with its State-approved seven-tower masterplan, it said.
Yesterday, it was revealed a letter by Star Queensland managing director Geoff Hogg urged State Government to “assess the costs of discontinuing a true industry partnership between the Palaszczuk Government and The Star that will leverage state-wide benefits”.
A recent poll shows 68 per cent of Coasters oppose another casino or extra pokies in a new resort. The Government is considering testing the market for a new casino project.