Australia's casino industry bets big on China gamblers

But the flurry of large-scale projects has raised concerns over viability and the social impact

Screengrab of an artist's impression of the Aquis Great Barrier Reef Resort.
Screengrab of an artist's impression of the Aquis Great Barrier Reef Resort.PHOTO: SCREENGRAB FROM YOUTUBE/ AQUIS CASINO

On a lush stretch of farmland in Queensland, a series of sugar cane fields is set to undergo an almost unimaginable transformation.

In what is expected to be one of Australia's biggest tourism projects, the 343ha of farmland outside the northern city of Cairns are eventually due to be replaced by a resort and casino complex.

The Aquis Great Barrier Reef Resort is being developed by Hong Kong mogul Tony Fung, who proposed an A$8 billion (S$8.15 billion) complex of eight hotels with 7,500 rooms, plus a golf course, a rainforest, an aquarium and an artificial lake and island.

Aquis revealed in late March that it will initially focus on the hotel resort and consider applying for a casino licence at a later date. Construction could start next year.

The Queensland government said it will consider granting a casino licence for the site, but a licence will not automatically go to Aquis.

The Cairns project is part of a broader push to massively expand and develop casinos across Australia over the next decade in a bid to attract gamblers from China and across the region. About A$15 billion worth of projects are in the pipeline to create or expand some 12 casinos in cities countrywide. 

Concerns have been raised over whether such a large-scale expansion of the gaming sector is viable, especially as China seeks to limit the amount of wealth moving offshore.

"Considering the financing required for these projects... it is clear that a gigantic windfall is anticipated," Mr David Neustein, an architect and writer, wrote in The Monthly magazine.

However, he added: "It seems inevitable that China's crackdown on wealth leaving the mainland will expand beyond Macau to ensnare those spending big in Australia."

But the concerns do not appear to be worrying casino operators.

Since the first casino in Australia opened in Tasmania in 1973, others have opened in all capital cities and also smaller cities such as Townsville and Launceston. State governments, which regulate casinos, had until recently tried to impose a limit of one venue per city.

But that changed in 2013 when Australian gaming mogul James Packer won approval to open a second casino in Sydney. The A$2 billion Crown Resorts luxury hotel and casino, aimed at high rollers, will open in 2020 or 2021.

Other projects include a proposed second casino for Brisbane and Queensland's Gold Coast; a A$1 billion upgrade of Star's Sydney casino; an A$850 million upgrade of the Gold Coast casino; and a A$300 million expansion for Adelaide's casino, including a luxury hotel and new  gaming areas.

The casino in Canberra that Mr Fung's Aquis Entertainment bought in 2014  is set to undergo a A$330 million upgrade, which includes two hotels.

All these wide-ranging plans are largely banking on a continued surge in tourists from China. More than one million Chinese travellers visited Australia last year - an increase of 22 per cent from 2014.

Some analysts have warned that the tourism boom from China faces risks such as lower income growth and a further weakening of the Chinese currency. But an expert on the tourism industry, Dr Deborah Edwards, of the University of Technology Sydney, said she did not expect any significant slowdown in the Chinese tourism market.

She said the new investment in Australian gambling venues could expand the overall market, noting that cities across the country offer  markedly different experiences for potential holidaymakers.

"As China continues to advance, its citizens will continue to travel," she told The Sunday Times. "If we have casinos in multiple areas, it creates choice."

The growing gaming sector has also raised concerns about the possibility of the increased presence of organised crime gangs and the use of casinos for laundering money.

As well, it could add to the country's problems with gambling addiction. Up to 500,000 Australians are believed to be addicts or at risk of becoming problem gamblers.

Discussing Adelaide's casino expansion, Mr Nick Xenophon, a prominent independent MP, said it would only add to the country's levels of gambling addiction.

"Any state government that is chasing economic development off the back of a boom in gambling is really chasing fool's gold because of the negative consequences," he told ABC News in January.

Dr Edwards said that aside from the potentially negative social impacts, casinos needed to focus on improving the broader economy by recruiting locally and getting visitors to step outside the gaming rooms.

A version of this article appeared in the print edition of The Sunday Times on April 10, 2016, with the headline 'Australia's casino industry bets big on China gamblers'. Subscribe