One of the Queensland’s LNP’s policies going into last year’s successful State election campaign was to get the tourism industry back on track and return Queensland to the number 1 tourism destination in Australia. Indeed, tourism is one of the Government’s “four pillar economy” contributing to over $15 billion annually and employing directly and indirectly close to 10 percent of all Queenslanders.1

As part of the Government’s most recent 16 day Trade Mission, the Premier and a group of Queensland industry leaders toured Asia, including Macau, Singapore and China to find business opportunities in industries such as tourism, resources and construction.2 Based on what he witnessed on that tour, the Premier acknowledged that there is huge global competition for tourists and believed mega-casino resorts are the answer for the Queensland tourism industry.3

No doubt influenced from his recent Trade Mission, the Premier and the Deputy Premier (Minister for State Development, Infrastructure and Planning) Jeff Seeney released a joint statement (Media Release),4 on 14 October 2013, announcing the upcoming invitation for expressions of interest (EOI) to redevelop the government precinct in the Brisbane CBD that could include new six star hotels, retail, restaurant and entertainment zones, theatre and convention facilities, new open spaces and also a new casino licence, intended to boost Queensland’s tourism and construction industries to encourage the provision of a world class integrated development in the Brisbane CBD.

The Government’s Media Release also noted that there will be two other casino licences available for major integrated resort developments in other parts of Queensland, which will raise the State count of casinos to seven, the highest in the country. These licences will only be available for the development of casinos that are part of integrated resorts, which are seen as the major drawcard for the expansion of the Asian tourism market, including China’s middle class, which is approximately 300 million and is expected to grow to more than one billion by 2030.

The Premier has said these mega-casino developments could lead to similar benefits for Queensland as they have for Singapore and Las Vegas. The Premier noted that visitor numbers in Singapore reversed a decline over the previous two years and rose more than 20 per cent after the Genting Singapore Plc’s Resorts World Sentos opened in 2010.5

The establishment of further casinos in Brisbane has been the focus of much recent media attention. Media reports on the “competition”, between Crown and Echo Entertainment, for the next casino in Brisbane, have been discussed in newspapers across Queensland.6 Whether “Bris-Vegas” can support 2 mega-casinos in close proximity to each other is unknown. What the Government has confirmed, that at this stage, it is only contemplating a maximum of an additional 3 casinos around the State. 3 casinos around the State. The State Government, at the request of the Gold Coast City Council, called for proposals to build a cruise ship terminal that contemplated a possible casino resort on the Broadwater. Some of the proponents withdrew their tender responses when the Government was unable to guarantee the casino component of the development. However, given the Government’s recent announcement the tourism industry is speculating whether the Government will call for new tenders on this proposed development with the addition of a mega casino.

The Government flags that a draft Queensland Casino Policy, which is planned for release simultaneously with the EOI for the Brisbane government precinct, and will consider issues such as market capacity, the implications of additional licences on existing and future operations, financial implications, community interests and social implications for the State. Our firm is informed by Government that this policy will be released sometime before the New Year.

The Casino Control Act 1982 (Qld) (Act) falls within the purview of the Department of Justice and the Attorney-General. The Attorney-General is the Minister responsible for making a recommendation to the Governor-in-Counsel to grant a future casino licence in Queensland.

However, historically, a casino licence application is a whole of Government initiative. There is no official “approved form”, nor is there a guarantee that a casino licence will be processed by Government. The Government has to give an in-principle approval to a casino licence before any paperwork or any form of application is lodged.

In Queensland, casino licences have only been issued to an applicant if that applicant can demonstrate that a significant community benefit can be derived from the proposed casino-related development. An example of this, is that the revenue generated by the State as a result of the granting of the last 2 casino licences substantially financed the construction of the convention and exhibition centres in Brisbane and Cairns.

In the past, the following factors have been considered by Government, under section 20 of the Act, as part of the assessment of previous casino proposals:

  1. the casino must be incidental to an “integrated resort”, which includes, for example, a retail precinct, restaurants and other tourism facilities;
  2. there is usually a requirement for the applicant to lodge an economic impact statement;
  3. the applicant must show that the proposed casino will benefit the infrastructure and increase employment in the region;
  4. extensive probity investigations are conducted on the applicant, which may take up to 12 months. These investigations are quite intrusive and applicants have withdrawn from the application process as a result;
  5. the applicant has, or has the ability to appoint, a person with sufficient experience in the management and operation of the proposed casino;
  6. there are investigations into the financial structure of the proposal;
  7. there are investigations into the applicant’s corporate structure.

The Government is well aware that something drastic needs to be done to change the fate of the State’s tourism industry. The Premier believes what Queensland is currently offering the global tourism market is run-down and eroded and he predicts a “bleak” tourism outlook for Queensland in the future.7 Premier Campbell Newman said the State could no longer just rely on its natural attractions such as the Great Barrier Reef8 to fix the State’s tourism industry.

In June 2013, the Government, with the Brisbane City Council and Brisbane Marketing, launched “A Guide to Hotel Investment in Brisbane – Australia”. The Guide seeks to promote investment in Brisbane’s hotel market and identified there is currently substantial shortage in hotel rooms within the Brisbane City. In fact, it is estimated that Brisbane is losing around 87,000 visitors and $136 million in visitor expenditure due to this shortage. This shortage is causing the market to defer an estimated 470,000 room nights every year, which is about 18% of current demand.

Sadly, it seems that after several months the Guide has not promoted the future investment in the Brisbane hotel market. The Government has now recognised the commercial necessity of a casino as the catalyst for new tourism infrastructure. Certainly, the media’s response to the Government’s announcement recording interest in casinos forming part of new tourism projects from developers scattered from the entire Queensland’s coast suggests that the Government is backing a winner.

It seems that the Queensland Government is not alone in its policy. Despite public controversy, the Ontario Government in Canada advocates the economic benefits of gaming, specifically increased tourism, job-creation and significant government revenue generation without raising taxes.

The Ontario Lottery and Gaming Corporation (OLG) has been a key revenue source for the Canadian province in an otherwise declining economic climate. The last two years has seen the OLG launch a large-scale casino development scheme, involving the division of Ontario into gaming zones with the aim of establishing integrated and multi-location gaming developments. Bids were invited from major operators, one of which would be granted a licence in each zone. The scheme included a new licence in Canada’s largest city, Toronto.