Star Entertainment Group is pledging to spend $68.31 million to renovate the Gold Coast Convention and Exhibition Centre and the Sheraton Grand Mirage resort along Australia’s Gold Coast, but there’s a catch: the company wants politicians there to grant it a monopoly over casino gaming in the region.
The Australian company is pitching renovations to the convention center and Sheraton as part of a broader $6.14 billion expansion effort in Queensland.
This is an investment that could have the project commence immediately after an agreement is reached,” said Star Entertainment Group Chairman John O’Neill in a presentation to investors earlier this week. “It’s not work that might be somewhere down the track. It’s real and we’re ready to commit here and now.”
O’Neill believes his company’s commitment to the area cannot be questioned, but he takes issue with the government’s desire to add a second integrated resort to the region.
Icon Wants A Monopoly
Star Entertainment describes its Star Gold Coast property as “a city icon of more than 30 years.” The casino there is home to more than 70 table games and over 1,600 electronic gaming machines.
While the region’s government appears intent on adding another gaming venue, the list of interested parties appears murky or unknown. Caesars Entertainment was previously interested in adding a property in Queensland, but the company scuttled those plans just weeks before Eldorado Resorts in June announced a $17.3 billion takeover bid for the Caesars Palace operator.
O’Neill believes his company’s position has long been clear: Star Entertainment supports efforts to boost tourism to the Gold Coast, but that the market is too small to support more than one casino.
As part of a $1.36 billion expansion plan, the Star Gold Coast would have new hotel towers added, two of which are already under construction. On its web site, the company says it has already broken ground on a $400 million mixed used hotel and residential tower in Southeast Queensland.
Competition And Complaints
Earlier this year, before Caesars said it’s dropping out of the running for an Australian integrated resort, the Minister for Innovation and Tourism Industry Development said that agency was conducting a global search of casino operators that could be interested in the Gold Coast.
In addition to Caesars, Hard Rock International was mentioned as a possible bidder for a Queensland gaming project, but that company is currently busy having recently unveiled a massive Florida expansion while pursuing gaming licenses in Illinois and Greece with eyes on Las Vegas, too.
For his part, Star Entertainment’s O’Neill sees the government’s efforts to woo bidders as a costly waste of time that has hampered his company’s stock price.
“The process has yielded nothing but considerable cost – tens of millions of dollars – to Governments and proponents, and is impacting our business, weighing on our share price,” he told investors.