Star Entertainment announced on October 14 that it had received an official casino license from the Queensland government to proceed with its A$3 billion Queen’s Wharf casino development project in Brisbane, the state capital. Star Entertainment, formerly known as the Echo Entertainment Group Ltd, and James Packer’s Crown Resorts had competed for the right to develop a casino in Queen’s Wharf and in November 2015 the Queensland government selected Echo Entertainment’s proposal.
Star Entertainment filed a report with the Australian Securities Exchange and said “The casino licence will be issued to a joint venture entity of which The Star Entertainment Group has a 50 percent interest. The grant of the new casino licence triggers the obligation of Destination Brisbane Consortium to make a payment of A$213 million to the Queensland Government.”
The Destination Brisbane Consortium is the joint venture entity that will be responsible for developing the Queen’s Wharf project. Star Entertainment, Far East Consortium (Australia) a subsidiary of the Far East Consortium International Ltd and Hong Kong’s Chow Tai Fook Enterprises Ltd are all members of the consortium. There is a fifty-fifty split in the investment breakup between Star Entertainment and the remaining partners. The Queen’s Wharf Brisbane project will include a casino, hotel, residential complex and other entertainment facilities and is expected to be one of the biggest tourist attractions in Queensland once completed.
The hotel will have around 1,100 rooms and suites and the residential complex will have around 2,000 apartments and will require around A$900 million to be developed. The project is expected to create thousands of jobs for the state, boost the local economy and generate significant gaming tax revenue for the Queensland government. Construction on the project is expected to commence in 2017 and be completed by 2022. Star Entertainment reached an agreement with the Queensland government for a casino license that is valid for the next 99 years. The Queen’s Wharf casino also has exclusive rights over a 60 kilometre radius covering Brisbane’s central business district (CBD) for the next 25 years. The consortium has to make a A$213 initial payment to the government and Star Entertainment’s share will be A$77 million which has to be paid before October 27.
The consortium plans to develop the Queen’s Wharf casino into a world class casino resort that can compete with the best casinos in Macau. Star Entertainment will focus largely on an Asian market and its Asian partners will look to use their contacts to bring in as many VIP gamblers as they can. The Queensland government will also prepare to welcome more Asian tourists once the casino resort goes live. Star Entertainment has had a strong year in 2015 reporting a 14.9 percent year-on-year net profit growth after taxes. The company is expected to receive around 60 percent of the profits once the Queen’s Wharf casino goes live.