Australian Casino Wars: Casualties Upcoming?, by Greg Tingle - 6th August 2010

The famed Australian casino wars continue to evolved with Tabcorp's Star City Casino in 'Sin City' spending an additional $285 million in upgrades including Lear jets, answering James Packer's Crown Limited (Crown Casino and Burswood Entertainment Complex) who are also upgrading with Crown focusing on a full entertainment and lifestyle experience. Star City (Tabcorp) remaining the main players on the giant casino chess board down under. Jupiters on the Gold Coast continues to remain a relative minor player but recently made headlines for its crime rate. Cairns in Northern Queensland still wants to make a major strike into the action with political fun and games a plenty. Expect a rally of missile exchanges from Star City and Crown Casino forecast to play out for months, even over a year, as rumours persist that Packer will eventually buy Star out. Media Man and Gambling911 fire up the rocket launchers and play a serious session of Star Wars and Battle Star Galactica with this special report from the war zone down under...

Crown Limited's Burswood Entertainment Complex Expansion...

Never completely satisfied with his casino interests and portfolio down under and in the greater Asia Pacific region, Australian casino and lifestyle king, James Packer, is investing in his ever growing "war chest", even while sailing the high seas in his Artic P, with both Melbourne based Crown Casino and Perth's Burswood to get major boosts, adding to the giant chess board in the world renown Aussie casino wars.

Crown Casino is in advanced stages of planning a significant redevelopment of the Southbank promenade that will further increase the casino's floor space, including extra gaming areas. Punters, be it whales, dolphins, tuna or other will be pleased.

The strategic chess move is in fact the biggest redevelopment of the promenade since Crown relocated to the banks of the scenic Yarra River in 1997. At least 6 restaurants along Southbank will either be redeveloped or replaced and planter boxes will be replaced by new landscaping along the waterfront.

These moves will bring new life to the promenade, making the casino complex more relaxing, accessible and providing more room for gambling and dining (including drinking).

Fairfax Media advise that revamp plans show a new gambling area above the Lucky Chan restaurant. The Waterfront and Cafe Greco restaurants will be replaced by a giant 300-seat Atlantic seafood restaurant.

The casino has lodged a planning application with the state government called the 'Crown Promenade Masterplan' to rework the Southbank precinct between Spencer St and Queens Bridge St.

The massive project is forecast to take 2 to 3 years to complete, should it get the green light from the state government.

Crown could not (or would not - speculation only) say how much the refurbishment would cost or how much larger the famed casino would be in the aftermath.

In a very sweet and smart deal, er... agreement, it remunerates the state government $1 a year rent on its Southbank location under a deal which lasts until 2034. Yes, you read correctly folks - $1 per year rent. Pluck a duck... we're paying too much for our Bondi Beach digs.

Casinos spokesman, Gary O'Neill, advised some of the expansion of the gaming floor was linked to the casino's deal with the state government last year to provide an additional 150 gambling tables. Shuffle up and deal with red hot poker, war and more. Cool.

O'Neill said the Southbank refurbishment was "part of our strategy to grow the number of international tourists visiting Crown and Melbourne. Under the terms of the legislation setting up the casino in the first instance, Crown is charged with maintaining a world-class and internationally competitive facility,".

He said the new Atlantic restaurant was expected to open early next year but no date had been set.

Gaming Minister Tony Robinson told reporters last year after the new tables were approved "If people ultimately want to have the boiled-sweets experience of casinos, let them go to Sydney. If they want the rolled-gold, dark chocolate experience, they're going to keep coming to Melbourne, and we're going to ensure that."

Crown executives have now met Department of Planning officials to discuss the master plan and a duplicate copy has been whipped away pronto to the Melbourne City Council for kind consideration.

Anti-gambling campaigner Tim Costello, always up for a quote or wise crack, criticised the casino expansion plans. "Again it proves that 'ministers of the crown' has a particular meaning in Victoria. They (Crown) get whatever they want as the first citizen," he said. Tim, we understand your passion and being a man of God and all, but mate, its getting very long in the tooth. It's about tourism, jobs (and business).

The man of God (we believe too ok) said the expansion failed the "commonsense test" as the community was opposed to more gambling in Victoria? Who said... did you do your own survey?

Gamblers lost $1.2 billion at Crown in the 2008-09 financial year and the state government collected $136 million in taxes. How much gamblers won has proved to be a challenge to find out, even for the Media Man group.

Rebecca Harrison, spokeswoman for the Gaming Minister, went on record with "In December last year there was bipartisan approval so the casino could expand its gaming operations." Nuff said.

Star City Casino In Sydney Seeking Whales, VIPs With Upgrades, Lear Jets...

Tabcorp, Australia’s biggest (but less famous than Crown) casino owner, will spend at least $160 million in attempt to woo high-stakes VIP's aka "whales" to Star City in Sydney with new luxury suites, private gambling rooms and its first couple of jet fighters... sorry, planes. No, they are not retired F1 11's from the Australian Air Force.

The plan is to win back big gamblers from rival Crown, and Asian hot spots like Macau and Singapore, Chief Executive Elmer "Fudd" (affectionate) Funke Kupper said in a press interview less than 24 hours ago.

It's all part of a $860 million "facelift" for Star City, Sydney’s first and only (legal) casino, which makes about 50% as Crown’s Melbourne money maker while being in a city 30% larger! What's up doc? Time to shake things up and they are, at a price. Tabcorp has lost market share among high rollers as its domestic rival is investing A$212 million upgrading VIP facilities, including adding its third "fighter" (satire) plane for high rollers - whales, whatever you wish to be addresses as kind sirs.

"It makes sense to go after that segment because it’s so lucrative but it’s going to be very hard to close the gap," advised Theo Maas, who helps manage $5 billion of equities at Arnhem Investment Management in Sydney. "Star City has the potential to do much better."

Tabcorp shares fell 2.2% to A$6.76 yesterday after reporting a 10% drop in annual earnings. The stock has declined 2.7% this year, compared with a 6.2% fall in the benchmark S&P/ASX 200 index. Experts are divided as to when the stock will see a real recovery.

Tabcorp Boss Speaks On Record...

Tabcorp’s full-year financial results demonstrate earnings from its casino division were $260 million - 29% below the past financial year.

Chairman John Story advised gaming markets in Victoria, where Tabcorp owns half the state’s poker machines, and Queensland, where it holds 3 casinos, had declined in the past financial year, "reflecting the economic circumstances".

Media Man should use that fantastic one liner more often.

As the government stimulus money ran out, this decline amplified, he went on.

The company attributed its drop in overall profits to its VIP casino gamblers being "luckier" this year than last. Not more skillful?

In the previous year, the win rate for Tabcorp was above its theoretical level by $25.5 million, while in 2010 the win rate was only $7.7 million below the theoretical level. Online pokie returns to players are frequently about 95%.

Revenue from all activities was unchanged at $4.2 billion, driven by growth in wagering and at Star City. Tabcorp’s expenses were up 2.9%.

Tabcorp is going to battle extra race fields charges in wagering and higher gaming taxes in Queensland casinos. These were offset by a lower effective income tax rate, due to one-off tax credits and the resolution of a long-running dispute with the Australian Taxation Office. Net profit for Tabcorp was $470 million, compared to $522 million last year. The investment at Star City, where renovations are already underway, will include a 3000-seat events centre that overlooks Sydney Harbour. The project will require state government approval. It will also fund two private aircraft to bring VIPs from Asia and improvements to VIP facilities and the like. Ask around town for where the ladies are or rush for the phone book or internet. Tabcorp announced a final dividend of 25 cents. So, in summary, Tabcorp is spending big, has massive expenses, is battling a bad economy, and is betting on a big result. Good luck. That's the casino economy!

Burswood Entertainment Complex: Numbers...

Return On Investment - circa 2013.

450 new jobs in 3 years, some of which earmarked for GenerationOne (an Andrew "Twiggy" Forrest and James "Casino King" Packer and friends initiative).

Mr Barry Felstead, Burswood chief exec advised along with $130 million of capital expenditure already made, Burswood would be investing almost half a billion dollars over a 5-year period.

"The investment will bring significant and sustained benefits to Perth and Western Australia," Mr Felstead told the press.

Mildura Jewel Casino: Victoria Update...

The Mildura casino development proposal is still alive. Developer Mr Haddad met with Premier John Brumby, Nationals leader Peter Ryan and Liberal leader Ted Baillieu on the proposed riverfront based casino and entertainment complex. He advised Mr Brumby was happy to receive letters of in-principle support from Mildura Council and tourism and development boards, however he still requires "bipartisan" support. "It is legislation for a casino, which is something that is a bit more sensitive," he said. "It would be foolish for the Government to come out with some sort of direction if they know that issue is not going to have at least any indication of support. I have to step back and just hope the National Party and the Liberal Party ... have no objection to a second casino being issued in Victoria."

The Late News...

Major Australian and Asia Pacific based media and new media companies continue to ramp up their online and offline coverage of the Australian gaming, igaming, casino and sports betting sector. Major media and non casino players include Fairfax Media, News Limited, NineMSN, Yahoo! and Google (Search, AdWords and other) and of course Media Man, now sporting Media Man Games and Media Man Poker, adding to Global Gaming Directory and Casino News Media.

A Media Man spokesperson said "Many major Australian and Asia Pacific based media companies, agencies and internet giants are continuing to increase their coverage and sometimes involvement in the casino, igaming, poker and sports betting world. From Google (search engine results), NineMSN (articles and multimedia) to News Limited and Fairfax, both carrying in-house sports betting brands, to us who cover the sector in a holistic fashion with news, pr, campaigns, articles, content, multimedia and portal development, its all happening. Many of these companies like us target the world and have a global strategy, marketing and media plan, but the Australian region remains on the radar and is an important part of the master plan. Of course, the internet is a global medium and not restricted to any one part of the world, so it ideally covers coverage of the casino and gaming sector, be it content, journalism, publicity of other. Different brands are also handing out casino and gaming awards and commendations following in the eGaming Review path, like Media Man 'Online Casino Of The Month' Award which PartyGaming's PartyCasino and Richard Branson's Virgin Casino have both won over the years. It's an extremely exciting time to be covering the casino and gaming sector, something our friends at Gambling911, CAP, GPWA and eGaming Review can vouch for. Expect Crown Limited, Tabcorp, Centrebet, PartyGaming and Virgin to make waves, and Media Man and Gambling911 to remain in the thick of the action."

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Folks, we hope you enjoyed this special follow up 'Australian Casino Wars - Casualties Upcoming?' edition. Know something we don't? Tell us in the forum which has been red hot of late. Stay tuned and in the coming days and weeks we will also expand on the coverage with New Zealand and Asia Pacific - Macau land based and online components of the ongoing war, along with special igaming reports which remain important chess pieces in the war zone, as as Yankee property developer friends Donald Trump and Hugh Hefner can vouch for, unlike their foe of sorts Steve Wynn, sticking with land based battles while expanding into the Asia Pacific region. Check or cheque mate? Bombs Away captain.

*Greg Tingle is a special contributor for Gambling911

*Media Man http://www.mediamanint.com is primarily a media, publicity and internet portal development company. Gaming is just one of a bakers dozen of sectors they cover. They also offer political analysis and commentary

*The writer owns shares in Crown Limited and Virgin and has conducted b2b with Crown, PartyGaming, Virgin, Fairfax Media, News Limited and Betfair

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