The Australian Competition and Consumer Commission (ACCC) said on Thursday it will not oppose the proposed acquisition by Aquis Reef Holdings (Aus) Pty Ltd of the Reef Hotel Casino (pictured) in Cairns, Queensland.
The ACCC considered that the proposed acquisition “was unlikely to substantially lessen competition in any relevant market,” it said in a statement on its website. There would also be little overlap between the target customers of the two properties, it added.
Aquis Reef wants to acquire the Reef Hotel Casino from Australia-listed Reef Casino Trust in exchange for AUD216.86 million (US$203.20 million). At the same time the company is seeking approval to build a 7,500-room casino resort, dubbed Aquis Resort, costing AUD8.15 billion in two phases at nearby Yorkeys Knob.
Gaming facilities at the Aquis Resort would include 750 gaming tables and 1,500 gaming machines.
The Aquis Resort is currently one of two proposals shortlisted by the Queensland government for the award of up to two casino licences as part of regional integrated resort developments. The Queensland government expects to make a final decision on the casino licences in 2015.
“The ACCC’s investigations suggested that there was likely to be limited competition between the Reef Casino and the Aquis Resort in the absence of the proposed acquisition,” ACCC Commissioner Jill Walker said in a statement.
The ACCC said it reviewed the proposed acquisition because it had the “potential to reduce the future number of casino owners in Cairns from two to one”.
In Thursday’s statement the competition watchdog said Aquis Resort would be a project of an unprecedented scale in Australia, with an estimated investment of AUD5 billion for its first phase.
“The ACCC was satisfied that, if developed, the Aquis Resort will focus primarily on international VIP customers because the size of its proposed investment would require a much higher return than could be obtained from non-VIP customers,” Ms Walker said.
Such customers spend a considerable amount at a casino per visit, “and generally upwards of AUD20,000 per bet,” the ACCC said.
“In contrast, the vast majority of the Reef Casino’s customers are non-VIP Cairns residents and domestic tourists, making bets at relatively low stakes. The Reef Casino makes most of its revenue from gaming machines, rather than from table games,” Mr Walker added.
The company proposing the Aquis resort is wholly owned by Tony Fung, former chairman of Hong Kong-based financial services company Sun Hung Kai and Co Ltd. Mr Fung’s Aquis is also proposing to acquire the Canberra Casino Ltd, which owns and operates the casino in Australia’s capital city.
