Casino Canberra Reports Major Losses
Lately, there’s been a lot of bad news involving Aussie gaming. For every upbeat report like Lottoland’s recent court victory, there’s a Crown Resorts scandal or story about Victoria pokie losses. Now it’s the Australian Capital Territory’s turn.
Casino Canberra, a well-known destination for punters in Australia’s capital city, recently reported significant losses. If you’d like to know how it came to this, I’ve put together a brief history of the casino.
Enter Casino Canberra
In 1992, Casinos Austria International was chosen by the Australian Capital Territory government to operate a casino. The company agreed to pay $19 million, as well as $500,000 per year. In exchange, they received a 99-year lease, becoming the first legal casino in the ACT.
A temporary casino opened in 1992, and a permanent facility came two years later. While Casino Canberra holds the only license to operate table games in the ACT, it cannot offer poker machines. This restriction was meant to protect clubs throughout Canberra, especially those already offering pokies.
Pushing for Pokies
Over the next 20 years, Casino Canberra tried multiple times to get permission to offer poker machines. These included failed amendments to the 2006 Casino Control Act, as well as offers to purchase licensing rights.
Meanwhile, it expanded to offer 39 tables games such as baccarat, blackjack, and roulette. A poker lounge was also installed, along with facilities for TAB betting. However, there were no stores, auditoriums, or hotel accommodations.
In 2014, Canberra Casino was purchased by the Aquis Group for $6.5 million. This organization was controlled by Hong Kong billionaire Tony Fung, and they promised “an exciting vision” for the future.
Plans for Expansion
Two years later, Aquis was talking about expansion. They approached the government with a $330 million plan for creating a retail precinct and entertainment complex. Unfortunately, this hit a snag in short order.
Aquis wanted permission to offer customers 500 poker machines. The ACT government, meanwhile, wanted to cap the number at 200.
The government demanded certain financial information, which Aquis claimed it couldn’t provide under the circumstances. They also wanted Casino Canberra to implement harm minimisation policies, which would have resulted in $2 maximum wagers.
Back to the Drawing Board
In December of 2018, the negotiations between Aquis and the ACT government finally reached a conclusion. The government rejected the proposal, instead asking Casino Canberra to come up with a more modest plan.
Blue Whale Entertainment
Just two weeks after negotiations fell through, Aquis made a surprise filing with the Australian Stock Exchange. In it, they announced the impending sale of Casino Canberra to Blue Whale Entertainment. Michael Gu, one of Australia’s most successful hotel giants, owns and operates Blue Whale.
Tony Fung and Aquis purchased Canberra Casino for $6.5 million in 2014. The proposed deal with Blue Whale was worth $32 million. For those keeping score, that’s a profit of $25.5 million.
Blue Whale announced their intention to upgrade the facility in order to attract larger crowds. Part of their plan involved the addition of several world-class restaurants.
New Talks and Bad Financial News
In June of 2019, Canberra Casino contacted the ACT government with a desire to re-open talks. Some wondered why, but it soon became obvious when the latest financials were reported.
For the first six months of 2019, Casino Canberra reported a loss of $2,553,772. These losses were up 18.4% from the same period in 2018. Meanwhile, revenue fell 2.7% to $11,985,194.
Earnings before depreciation, amortisation, tax, and interest were down 176.2%. Earnings before interest and tax were down 34.7%.
What Does the Future Hold?
It’s difficult to determine what the future holds for Casino Canberra. They continue to bleed money, but the government’s unwillingness to budge on several key points makes expansion difficult. As the two sides search for common ground, the clock is ticking.