Star Entertainment Group announced plans for a fourth Star Gold Coast tower in its AU$850 million expansion. The Star Gold Coast’s new tower design stands 215 meters tall with a hotel, spa, restaurants, and night clubs planned. If completed, the Star Gold Coast’s tower will rival the Star Sydney’s new 228-meter tower.
The new tower is the second mixed-use hotel and apartment tower at the Star Sydney. Star Entertainment broke ground on the AU$400 million Dorsett in 2018, which expects its grand opening in 2022. Star Entertainment plans the tower to attract Asian high rollers in a counter-move against the upcoming Crown Sydney. CEO Matt Bekier stated, “This latest hotel tower will further progress the internationally competitive resort facilities we are offering to domestic and international tourists.”
The plan is to draw “interstate and international visitors to turbo-charge the tourism industry” of Gold Coast, and of southeast Queensland in general.
The designs are part of a AU$2 billion expansion for the Gold Coast casino. The fourth tower might never happen, if the Queensland government approves a second casino for Gold Coast. Competition would require a scaled-down version of the plan, since a second casino would hurt the resort’s tourist numbers.
Matt Bekier made the plans contingent on Gold Coast remaining a single-casino city. He said, “The Star Gold Coast will be the equal of the finest integrated resorts in the world and complement our $3.6 billion project at Queen’s Wharf Brisbane.”
Bekier qualified those remarks with the statement, “If our masterplan is rolled out in full.”
He added, “Under the right conditions and circumstances, we will operate both properties in tandem as beacons for southeast Queensland.”
Star Entertainment’s fast-track tower announcement might be an attempt to put pressure on the Queensland government. Last month, Queensland called for bidders on a second casino. Australian newspapers cited Genting Group, Hard Rock International, and Caesars International as possible license applicants. Whether all three eventually submit a bid is another matter, but Star Entertainment would face stiff competition from any of the three.
Genting Group owns Resorts World Sentosa in Singapore. The Malaysian casino group continues development of Resorts World Las Vegas, a US$4.1 billion resort that will be the most expensive casino in Las Vegas history.
Genting also owns Resorts World Queens (Aquaduct), one of only two racinos in New York City, and Resorts World Catskills in Upstate New York. The company also owns oil platforms and rubber plantations, so it is a massive company.
The Seminole Tribe of Florida owns Hard Rock International, which operates casinos in Florida, New Jersey, and a few other countries worldwide. Hard Rock International licenses the brand name “Hard Rock” to gaming and non-gaming ventures, so the Seminoles don’t own all Hard Rock casinos. For instance, UK billionaire Richard Branson owns Hard Rock Las Vegas.
Despite that, the Seminole Tribe spent US$500 million to renovate the Trump Taj Mahal in Atlantic City. After a year-long upgrade, Hard Rock Atlantic City opened in June 2018. The tribe forms grand plans. The casino planned a 200-event concert and live show schedule for its first year of operation.
Caesars Entertainment is one of the most recognizable casino companies in the world. It owns Caesars Palace, home of many sporting events over the years. Caesars also owns the Rio All-Suite Hotel and Casino, the yearly home of the World Series of Poker (WSOP) for the past 15 years.
Despite Caesars’ fame, it is emerging from years of financial trouble. Apollo Group and TPG Global bought Harrah’s Entertainment in a leveraged buyout in January 2007. The buyout left Harrah’s with as much as $30 billion in debt, a huge burden when the global recession hit in 2008-2009.
Harrah’s renamed itself Caesars Entertainment in 2009 and slowly bought down its debt to $23 billion. It wasn’t enough. Former CEO Gary Loveman moved 12 casinos out of the Caesars Enteraintment Operations Company (CEOC), then declared CEOC’s bankruptcy in 2015. The move led to a two-year bankruptcy reorganization battle, which only ended when Caesars paid the plaintiffs $5 billion.
Since then, Mark Frissora guided the company through the financial hardships, but with midling success. Activist investor Carl Icahn bought a 9% share of the company in January, then called for Caesars to sell itself. Other major investors like Canyon Partners (10%) and Oppenheimer Funds (6%) called for Caesars to sell.
Meanwhile, Icahn placed three proxies of the board of directors, including new CEO Anthony Rodio. Therefore, Caesars looks as if it will sell itself to another group this year or next. Whether it plans to invest in Gold Coast before a buyout or merger is anyone’s guess.