Second casino license in the Australian state of Queensland will not be awarded, the government in the state announced, as investor appetite has waned due to the current uncertainty stemming from the ongoing health situation. The state will not grant the requested long-term exclusive casino license to Star Entertainment Group as both sides failed to reach an agreement.
“Global market conditions are clearly impacting investment at present and I can confirm that this government has no intention of reviving the market process for a new integrated resort – including a second casino – on the Gold Coast.”Kate Jones, Minister for State Development, Tourism and Innovation
Queensland’s Development Minister pointed out there would not be a second casino application process despite failure in the negotiations with the only casino licensee, Star Entertainment Group, as both sides could not reach an agreement and the deal on the table did not stack up for taxpayers.
Casino Exclusivity in Exchange for Investment
Star Entertainment Group opposed the idea of a second casino operator stating the market was not large enough for two casino properties. The company offered an investment to the amount of AUD$2.2 billion in tourism projects, in exchange for casino monopoly in Queensland, but state officials pointed out such a deal would have shut the casino market for the next 30 years.
The project behind the massive investment included the opening of additional 650 hotel rooms and 2,000 luxury apartments, while creating 9,000 jobs in the construction sector and 2,800 operational positions. As Star’s Chairman John O’Neill outlined, the company was committing a total of AUD$4.5 billion to help re-invigorate tourism in South East Queensland. Despite being denied exclusivity, Star Entertainment Group reiterated its stance to continue to invest heavily in the state, and in particular on the Gold Coast.
“We have confidence in the future of tourism and, under the right conditions, will continue to invest through our $2 billion-plus Gold Coast master plan that will help government deliver further significant economic benefits for Queensland, including thousands of jobs.”John O’Neill, Chairman, Star Entertainment Group
At the beginning of July, Star Entertainment Group announced the reopening of its Star Gold Coast casino property, as restrictions in the state were lifted. The casino on the Gold Coast would feature a limited capacity of up to 2,600 people, alongside extensive cleaning and sanitizing protocols and physical distancing requirements.
The news there will not be a second casino application process in the state for the foreseeable future is a favourable outcome for Star, as it will remain the single casino operator in Queensland. In other words, Star Entertainment Group will have its exclusivity, without having an official exclusivity. At least until uncertainty related to the sudden and unpredictable developments regarding the virus subsides and investor appetite in the gaming sector returns.