Sydney’s casino wars are again hotting up as the 2019 deadline for the expiry of Star Entertainment’s exclusive licence to run a casino in the emerald city looms.
A plan by Star to rival James Packer’s luxury Barangaroo casino and resort, with a 200-metre hotel tower on the opposite shore of Darling Harbour, has been put to the Baird government.
Star says it can tap a shortage of luxury accommodation for well-heeled Chinese tourists in Sydney. Two Hong Kong companies with strong links to the mainland Chinese tourism sector, jewellery retailer Chow Tai Fook and Far East Consortium, are in negotiations with Star Entertainment to expand the Star Casino to a six-star integrated resort.
The three companies are already in a joint venture to build a $3 billion casino and resort in Brisbane at Queens Wharf.
A Star spokesman said Chow Tai Fook has 4 million members, 1.4 million VIP members, and a link with China Travel, which books holidays for 50 million mainland Chinese tourists.
“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,” he said.
Mr Packer won the right from the O’Farrell government to build a luxury casino and resort at Barangaroo to lure high rolling Chinese gamblers. It will open after the expiry in 2019 of Star’s exclusive licence to run a casino in Sydney.
Star believes that unless it can offer a luxury destination, complete with hotel and restaurants, to compete with Mr Packer’s, international gamblers will be less likely to roll the dice in its Sydney casino. The strategy is to capture the Chinese traveller as they make their booking to Sydney, and thereby protect gaming revenues.
Star Entertainment would work with the NSW government through the normal planning approval processes, the spokesman said.
Mr Packer controversially won the right to build his casino through a secret unsolicited bid.
Chow Tai Fook has 2295 shops in 500 Asian cities, but has experienced a downturn in jewellery sales in Hong Kong as mainland Chinese tourists instead travel further afield to “overseas” destinations.
The company is diversifying into tourism.
The Star spokesman said the company would have upgraded its Sydney casino and hotel complex, to match the Brisbane resort, regardless of whether or not Mr Packer had a rival casino in Sydney.