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Australia's new casino boom

Australia's casino landscape is set to change significantly over the next five years, with two major new casinos set to open and the possibility of as many as 2-3 others beginning construction.

Sydney, Australia's largest city, has a second casino under construction which will be ready to open by 2021 at Barangaroo. The $2 billion project will feature a VIP casino operated by Crown Resorts, which already operates casinos in Melbourne and Sydney.

Final approval for the project was granted in June this year, with a 350-room hotel also planned for the site, which overlooks Sydney Harbour.

While the new Sydney casino will compete with the monopoly enjoyed by The Star, the operator of that casino, The Star Entertainment Group, is behind the new $2.9 billion Queen's Wharf development in Brisbane, which is set to open in 2022.

The massive development, the biggest-ever undertaken in Brisbane, will also feature the construction of 2000 apartments. Star Entertainment Group has come together with joint venture partners Far East Consortium and Chow Tai Fook to begin construction early in 2017.

Star Entertainment Group also operate Jupiters Casino on the Gold Coast and recently announced a $345 million facelift of that venue with the likelihood of a second casino licence being granted in that region.

Crown Resorts and ASF have come together to propose a $3 billion project along The Spit, which is expected to feature a casino as well as a significant residential development and expansion of nearby Sea World to become the biggest theme park in the country.

Gold Coast has become a battle ground for Australia's two biggest casino operators, with Star Entertainment Group also purchasing a major resort in the region, although there are no current plans for a casino license.

The Queensland State Government offered an additional three casino licenses in 2013 on the proviso they involved major resort developments.

Tony Fung's Aquis were interested in developing another casino in Cairns, but that proposal has since been shelved, with the Queensland government indicating they will put that licence back out to market.

With that in mind, several parties, mostly backed by Chinese companies, have indicated an interest in developing resorts. Great Keppel island has been mooted as one possible destination, while the regional town of Toowoomba has also expressed an interest.

Elsewhere, there are moves to open up a second casino licence in Victoria, but a recent bid to develop a casino/resort in the regional town of Mildura was rejected by that state government.

However, despite the flurry of construction activity in the casino industry, the major concern for Australia's two biggest operators in whether the Australian market can sustain this growth. The Chinese government is cracking down the marketing of overseas gambling destinations to Chinese citizen.

Eighteen Crown Resorts marketing staff, including three Australian executives, were recently detained in China. With a substantial part of the business case for the new casinos in Brisbane and Sydney founded on VIP tourism from Asia, both Star and Crown are nervously eying developments, with formal charges expected to be filed by Chinese authorities within a week.