The fierce competition between Star Entertainment and Crown Resorts, two of the biggest casino operators in Australia, is working out very well for New South Wales. Star Entertainment has enjoyed an exclusive casino license to operate in Sydney for a number of years and that license will expire in 2019.
Star Entertainment will no longer have exclusivity in Sydney as billionaire James Packer’s Crown Resorts have been given approval to build a mega-casino resort in Barangaroo that is expected to cost over $1. 2 billion. The Barangaroo casino is a pet project for Packer who wants to complete it as a tribute to his father, the late Kerry Packer who had earlier tried to build a casino in Sydney but did not succeed.
Star Entertainment is aware that the Barangaroo casino will significantly eat into its profits and is now taking steps to see how it can compete with the new casino. The company recently announced that it would like to construct a 200-metre hotel tower and sent in a proposal to the Baird government. Star Entertainment has stated that it sees a shortage of luxury accommodation in Sydney and would like to bridge this gap by constructing a new tower opposite the Darling Harbour.
Star Entertainment has already partnered with Hong Kong companies Far East Consortium and Chow Tai Fook to build a $3 billion casino resort in Queens Wharf, Brisbane and wants to leverage this partnership again to build the 200 metre tower in Sydney and upgrade its Star Casino rating to a six star integrated resort. The company will target VIP gamblers and big spenders from Mainland China to fill the new luxury resort.
In a statement, a representative for Star Entertainment said “The affluent Chinese middle class is on the rise and looking further afield. There’s an opportunity to capture some of that. In Sydney, occupancy rates at the high-end are at spillover capacity. There’s certainly demand that requires additional supply”.
Chow Tai Fook is a billionaire dollar company that has a number of business interests including jewellery. The company has a database of over 4 million customers and 1.4 million of these are VIP customers. Chow Tai Fook will leverage its relationship to bring these VIP clients to Australia, especially promoting Brisbane and Sydney. The new hotel tower, if approved, will generate hundreds of employment opportunities in Sydney which is another incentive for the government to approve Star Entertainment’s proposal.
Star Entertainment will now work together with the New South Wales government in the coming weeks to see if their hotel tower gets approval.