Australian and New Zealand casino operator The Star Entertainment Group says its Asian VIP gambling segment has been on fire since the year began.
On Monday, The Star held its annual investor day presentation, which included a trading update on the year-to-date up to May 23. The company said total ‘normalized’ gaming revenue is up 16.4% from the same period last year, thanks in part to its thriving ‘International VIP Rebate’ business (aka Asian gambling whales).
The Star said its VIP turnover was up 63.7% year-on-year, due in part to the company’s efforts to expand its quest for VIP customers beyond China – or ‘North Asia’ as the Beijing-crackdown-phobic company euphemistically calls it – to other South Asia nations and also recruiting more non-junket premium mass customers.
While VIP volume was way up, the VIP win rate was below the theoretical 1.35% rate. That trend was on full display in the second half of 2017, during which VIP win sunk to just 1.06% as luck favored the gamblers for a change.
It wasn’t just Asian whales who had hot hands, as the company reported “solid” domestic gaming volume growth suffering from “lower table hold rates.” Despite the unlucky streak, domestic revenue nonetheless managed to nudge up 2.6% year-on-year.
The Star also announced that its Queen’s Wharf integrated resort project in Brisbane would now carry a price tag of A$2.4b (US$1.8b), a significant hike from the previous estimate of A$1.8b. The revised plans now include a 25% larger gaming floor, more retail and dining options, an expanded ‘Sky Deck’ and more hotel rooms.
The Star says Queen’s Wharf will eventually occupy roughly 15% of Brisbane’s central business district. Its gaming options will include around 2,500 slots, between 250 and 400 gaming tables, plus between 350 and 800 multi-terminal gaming machines.
The Star is on the hook for 50% of the Brisbane project’s costs, while its two joint venture partners – Hong Kong conglomerate Chow Tai Fook Enterprises and property developer Far East Consortium International Ltd – will split the other 50%.
The Star received local approval to break ground on the Brisbane project in February and the company is targeting opening doors to the public sometime in the second half of 2022.
