Echo Entertainment is the owner of two Queensland-based gambling resorts, Jupiter Casino in Gold Coast and Treasury Casino in Brisbane. Recent changes to the way poker machines are delivered to players have increased pokies wins for operators across the state, but according to UBS research analysts David Fabris, Echo stands to reap a majority of the rewards.
Echo Entertainment is best known for its immense gambling property in Sydney, The Star, but that’s mostly due to the fact that the Victorian resort is much larger, and has historically received the brunt of the company’s investments. However, with the help of affluent investors from Hong Kong, Echo has won a bid to construct a $2 billion gambling resort hotel complex on Brisbane’s Queen’s Wharf waterfront (see image below), and is currently funneling $345 million worth of refurbishments into Jupiter Casino.
Mr. Fabris is the new head of analytics for gaming and engineering at UBS Financial, having replaced the bank’s former lead analyst, Sam Theodore, who was lured to a Director position at BlackRock in September. His initial investigation into Queensland’s gaming market pens Echo Entertainment as the primary leader in the Sunshine State’s future pokies wins.
The UBS researcher found that pokies revenue from pubs and clubs in the Gold Coast and Brisbane regions have increased 9% and 7.4% respectively in the 3rd quarter of 2015, and expects Echo Entertainment to present far more impressive results when its Q3 financials are released, which he said is likely to occur during the trading update of the company’s November 4th shareholder meeting.
While the expenses going out to construct and renovate the facilities are incredibly high, shareholders don’t seem to be too concerned because, as Mr. Fabris pointed out, the revenue potential from high-rolling punters—especially the foreign variety—is expected to be tremendous. Australia is fast becoming a prime destination for Asian VIPs, and Echo is determined to tap into that market with its current expansion projects.
Artist Impression of Echo Entertainment Queen’s Wharf Casino Project
Echo beat out Crown Resorts for the new Queen’s Wharf casino project in July 2015. It’s been estimated that the mega-resort, which will include four, five and six star hotels, destination casino gambling, multiple restaurants, retailers and entertainment complexes spanning 12 football fields worth of acreage, won’t be finished until 2022. The refurbishment project at Jupiter Casino should be completed much sooner, having begun in 2013.
Better Perks for Pokies Players, Higher Revenue for Echo
Compounding the expectations for higher pokies wins are a newly titivated loyalty program at Echo’s Sunshine State locations, and the recently altered laws of Queensland regarding poker machines at licensed, land-based casinos. In 2014, legislators amended the law to allow pokies to accept larger denominations of notes than the old $10 limit, among other things, and already the changes have resulted in a notable increase of revenue.
Since the new loyalty program and poker machine laws went into effect in the second half of the 2014-15 fiscal year, Mr. Fabris said, “we have seen significant operational improvement at Echo’s properties, which has seen it deliver growth ahead of the local markets.”