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Returns on second Gold Coast casino a challenge: Macquarie Research

Mon, Nov 19, 12:42pm by Staff Writer

Global corporate research company Macquarie Research has published a report outlining the impact on the local market of the proposed second Gold Coast casino.

The Queensland State Government will go to market within weeks for the new development, with global entertainment giant Hard Rock International one of the front runners to operate the new casino.

The site of the casino remains unknown, with locations in Southport and Broadwater Parklands proposed by Gold Coast Mayor Tom Tate.

The tourism hub would seek to attract high-profile musical acts, contain apartments, a shopping centre and gaming venue.

Macquarie notes that a development of larger than A$400 million would struggle to deliver an ‘appropriate return’.

“We see challenges in generating an appropriate return on a development larger than A$400 million,” Macquarie said.

Hard Rock set to mirror Spanish investment

The board of Hard Rock International has rubber stamped an A$2 billion plan to invest in the Gold Coast, with the Queensland Government likely to make a decision on whether or not it supports a second casino license before Christmas.

Hard Rock’s proposal would mirror its Barcelona venture according to the company, with an integrated resort featuring 1000 rooms, a shopping precinct, a major entertainment centre and a casino.

The existing Star Casino on the Gold Coast has recently been approved for A$2 billion in upgrades, with a company spokesman outlining it was focused on expanding its facilities and not on a potential new local player.

A Star spokesperson told the Gold Coast Bulletin “The Gold Coast is not the most attractive market for a new integrated resort and casino, in our view, relative to other regions within Australia.”

The Star Casino’s masterplan includes a commitment to no more poker machines for the Gold Coast and would integrate tourism assets across the Star Gold Coast, Queens Wharf Brisbane and the Sheraton Grand Mirage to A$9 billion.

Global Tourism Hub at the centre of Queensland Government’s plans

The state government introduced the Global Tourism Hub concept that involves the construction of integrated resorts across the state.

The plan aims to attract national and international investors and is expected to boost Queensland’s A$25 billion tourism industry that supports more than 200,000 jobs.

Hard Rock International is said to be on board with this ‘holistic mode’ presented by lawmakers and is keen to develop an ‘entertainment-centric’ property, with the Gold Coast being its preferred location.

Local club and business owners met the news of Hard Rock’s interest in expanding its business to the Gold Coast with dismay.

Chief Executive Officer of Queensland Clubs Doug Flockhart told the Gold Coast Bulletin that recent research has shown that a second casino on the Coast would have a direct impact on at least 30 local clubs and an indirect impact on hundreds around the state.

The state’s community club sector contributes A$850 million back to communities and a second casino would affect these contributions Mr Flockhart said.

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