WE ARE SET FOR A JACKPOT

WE ARE SET FOR A JACKPOT
WHAT is a vice of some is incredibly virtuous to the Australian economy.

Casino giants are gearing up for the opening of at least three new mega-casinos in the next five years, raising our nation's casino stakes by 23 per cent.

The Acquis Great Barrier Reef, a Chinese consortium developed Gold Coast resort, Crown's Barangaroo development and a potential either-or Crown-Echo Queen's Wharf development are all in the running to become the first new Australian casino since Accor Casino Investments opened the Reef Hotel Casino Cairns in January 1996.

Asian wealth and a boom in high-rollers are driving development in this industry, and carrying a projected revenue growth of 10.3 per cent between 2014-15 and 2019-20 according to IBISWorld.

IBISWorld senior industry analyst Spencer Little says new casinos will present free-flowing benefits to industry, and the arguments for them are well-founded considering Australian gamblers were found to spend more money on gambling services than any other country by a 2013 study in The Economist.

"The effects on the mid to high end of the gambling market will be significant, and will include increased competition and improved revenue flows, not to mention resulting benefits for local tourism and hospitality," says Little.

The Australian casino industry is dominated by three major players - Crown Resorts (ASX: CWN), Echo Entertainment Group (EGP) and SKYCITY Entertainment Group (SKC).

Brisbane-based EGP experienced the most growth in the five years to 2015, enjoying an annualised growth of 5.3 per cent, surpassing CWN's 5 per cent growth.

EGP still holds a smaller market share than CWN, at 31.7 per cent compared to 52.5 per cent, but with only one casino less the odds could eventually be in its favour.

"The industry's two largest players have asserted their dominance and increased their control over the market over the past five years, in large part due to increased expenditure on marketing," says Little.

"Crown Resorts benefited from the rebranding of the Perth casino in 2012 and has also sought to develop new hotels and expand its accommodation facilities to attract more wealthy international visitors. Echo Entertainment Group has employed a similar strategy."

While EGP and CWN seem the fiercest contenders, time will tell if new players shake up the mix even more.

Alternatively, the Australian market could be derailed by Asian destinations, which have recently taken out much bigger beasts.

"Macau, with its 33 casinos, is a particularly high-growth market, and has attracted an increasing number of international high rollers and tourists to its luxury casinos," says Little.

"Macau has surpassed Las Vegas in revenue over the past five years, which is a colossal achievement."


Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support

Looking for a credit or charge card that’s built for your business? Try American Express
Partner Content
A good credit card should work for you, not against you, and let you and your business ...
American Express
Advertisement

Related Stories

ACCC cracks down on greenwashing, fake online reviews

ACCC cracks down on greenwashing, fake online reviews

The nation’s consumer watchdog is cracking down on businesses...

Going green: Investible backs eight climate tech companies through $30 million fund

Going green: Investible backs eight climate tech companies through $30 million fund

A cohort of eight innovative technology companies contributing to d...

Devine abandons Alba to upsize at Burleigh Heads with $400m Burly tower

Devine abandons Alba to upsize at Burleigh Heads with $400m Burly tower

In a sign that the heat has yet to come out of the Gold Coast prope...

Mandatory COVID isolation to end nationally mid-October

Mandatory COVID isolation to end nationally mid-October

National Cabinet has today determined that mandatory isolation peri...