R9201 Casinos in Australia Industry Report

AU INDUSTRY (ANZSIC) REPORT R9201
Casinos in Australia
Let it ride: Declining tourism numbers and falling incomes constrain revenue growth
Tommy Wu | May 2020
IBISWorld.com +61-3-9655-3800 info@IBISWorld.com

Casinos in Australia R9201 May 2020
Contents
About This Industry...........................................5 Competitive Landscape...................................26
Industry Definition..........................................................5 Market Share Concentration....................................... 26

Major Players................................................................. 5 Key Success Factors................................................... 26
Main Activities................................................................5 Cost Structure Benchmarks........................................ 27
Supply Chain...................................................................6 Basis of Competition................................................... 29
Similar Industries........................................................... 6 Barriers to Entry........................................................... 30
Related International Industries....................................6 Industry Globalization..................................................31
Industry at a Glance.......................................... 7 Major Companies............................................ 32
Executive Summary....................................................... 9 Major Players............................................................... 32

Other Players................................................................35
Industry Performance..................................... 10
Operating Conditions...................................... 36
Key External Drivers.....................................................10
Current Performance................................................... 11 Capital Intensity........................................................... 36
Technology And Systems........................................... 37
Industry Outlook............................................. 15 Revenue Volatility........................................................ 39
Regulation & Policy...................................................... 40
Outlook......................................................................... 15
Industry Assistance..................................................... 40
Performance Outlook Data......................................... 16
Industry Life Cycle....................................................... 16 Key Statistics.................................................. 42
Products and Markets..................................... 19 Industry Data................................................................42

Annual Change.............................................................42
Supply Chain................................................................ 19
Key Ratios.................................................................... 42
Products and Services.................................................19
Demand Determinants................................................ 21 Additional Resources...................................... 43
Major Markets..............................................................21
International Trade.......................................................23 Additional Resources.................................................. 43
Business Locations..................................................... 23 Industry Jargon............................................................ 43
Glossary Terms............................................................43
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Covid-19
Coronavirus IBISWorld's analysts constantly monitor the industry impacts of current events in
real-time – here is an update of how this industry is likely to be impacted as a result
Impact Update of the global COVID-19 pandemic:
• The Casinos industry is expected to face significant disruptions to their operations

due to the COVID-19 outbreak. Social distancing measures, restrictions on non-
essential businesses and travel restrictions on overseas businesses are anticipated
to contribute to a 27.4% decline in industry revenue over the current year. For more
detail, please see the Current Performance chapter.
• The major players in the industry have faced challenging operating conditions over
the first half of 2019-20. Crown recorded a significant decline in VIP turnover, while
Star Entertainment Group recorded only a slight increase in VIP turnover over the
period. The COVID-19 outbreak is expected to further worsen trading conditions for
the major companies. For more detail, please see the Major Companies chapter.
• Many costs incurred by the industry have risen as a share of revenue due to the
temporary closure of casinos across Australia, which have put upward pressure on
several major expenses for industry operators. For more detail, please see the Cost
Structure Benchmarks chapter.
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About This Industry

Industry Definition Companies in the industry operate facilities that offer a range of gambling activities,
such as table wagering games and electronic gaming machines. Firms also
generate revenue from associated entertainment, hospitality and accommodation
facilities.
Major Players Crown Resorts Limited
The Star Entertainment Group Limited
Main Activities The primary activities of this industry:

Legal casino operation
The major products and services in this industry:

Electronic gaming
Table gaming
VIP program
Non-gaming and other services
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Supply Chain
SIMILAR INDUSTRIES
Social Clubs in Australia Lotteries in Australia Horse and Sports Betting in Hotels and Resorts in
Australia Australia
RELATED INTERNATIONAL INDUSTRIES
Global Casinos & Online Non-Hotel Casinos in the US Lotteries & Native American Casinos in New Zealand
Gambling Casinos in the US
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Industry at a Glance
Key Statistics Key External Drivers % = 2015-2020 Annual Growth
$4.5bn -0.3%
Number of poker and gaming machines
-0.9%
Total tourist visitor nights
Revenue
-5.0% 2.0%
Annual Growth Annual Growth Annual Growth Per capita gambling expenditure Real household discretionary income
2015-2020 2020-2025 2015-2025

Industry Structure
-7.4% 8.5%
POSITIVE IMPACT
$555.5m Barriers to Entry
Profit
High
Annual Growth Annual Growth
2015-2020 2015-2025 MIXED IMPACT
-13.6% Life Cycle Capital Intensity
Mature Medium
12.4% Globalization
Medium
Competition
Medium
Profit Margin
Annual Growth Annual Growth

NEGATIVE IMPACT
2015-2020 2015-2025
Revenue Volatility Industry Assistance

-5.1%
High Low
Concentration Regulation
9 High Heavy
Businesses Technology Change

High
Annual Growth Annual Growth Annual Growth
2015-2020 2020-2025 2015-2025
Key Trends
2.4% 0.0%
The COVID-19 outbreak and temporary closure of casinos
have severely affected the industry
28,878 Industry operators have faced significant competition from

new casinos opening in Asia
Employment
Crown Resorts and The Star Entertainment Group have
significantly refurbished their casinos
2015-2020 2020-2025 2015-2025
Demand from China is also expected to slow due to weaker
1.8% 1.4% economic growth in the country
The new casino at Barangaroo will target VIP players, who
typically place high-stakes wagers
$1.3bn Competition from casinos in Asia is forecast to remain fierce,
Wages constraining industry growth
COVID-19 restrictions are expected to cause industry
revenue to decline significantly
2015-2020 2020-2025 2015-2025
-6.0% 8.3%
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Products & Services Segmentation
25.7% 34.9% 20.5% 18.9%
Electronic gaming Table gaming VIP program Non-gaming and other

services
Casinos
Source: IBISWorld
Major Players % = share of industry revenue SWOT
STRENGTHS
High & Steady Barriers to Entry
Low Imports
High Profit vs. Sector Average
Low Product/Service Concentration
WEAKNESSES
Low & Steady Level of Assistance
High Volatility
High Customer Class Concentration
Low Revenue per Employee
High Capital Requirements
OPPORTUNITIES
High Revenue Growth (2020-2025)
Real household discretionary income
THREATS
Very Low Revenue Growth (2005-2020)
Low Revenue Growth (2015-2020)
Low Performance Drivers
Number of poker and gaming machines
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Executive Revenue in the Casinos industry has declined over the past five
Summary years.
This decline has been due to a drop-off in VIP program play at Crown Resorts, the
industry's largest operator, in 2016-17, and the temporary closure of casinos across
Australia in the current year due to the COVID-19 outbreak. Overall, industry revenue
is anticipated to decline at an annualised 7.4% over the five years through 2019-20,
to $4.5 billion. In the current year, social distancing measures, restrictions on non-
essential businesses and travel restrictions on overseas visitors are expected to
result in a 27.4% revenue decline. The outbreak has led to the temporary cessation
of gaming activities and other non-essential services, severely limiting revenue for
casinos. Currently, only industry accommodation services are operating at a
reduced capacity.
Local casino operators have faced increasing competition from overseas casinos
over the past five years, particularly for premium and VIP gamblers. This trend was
compounded by legal issues regarding gambling promotion in China that
significantly reduced VIP program gaming at Crown Resorts in 2016-17. VIP
turnover has yet to fully recover for the major players. However, these operators
have continued to dominate the industry over the past five years. Both Crown
Resorts and The Star Entertainment Group have completed significant
refurbishments over the period, to attract new guests and retain existing
international patrons. These two players operate five of the industry's 13 casinos,
and together are expected to account for just under 90% of industry revenue in
2019-20.
Industry revenue is forecast to grow at an annualised 8.5% over the five years
through 2024-25, to $6.7 billion, rebounding from the current low caused by the
COVID-19 outbreak. Crown Resorts' new Barangaroo casino in Sydney and the
Treasury Casino redevelopment as part of the Queen's Wharf project in Brisbane are
anticipated to boost industry revenue over the period. Crown Resorts plans to open
its Barangaroo property in December 2020, while redevelopment works on Queen's
Wharf and the Treasury Casino are set to be completed by 2022. However, slowing
economic growth in China, and competition from online casinos and gambling
platforms are projected to reduce demand from Chinese and VIP gamblers. In
addition, casinos in Singapore and Macau are expected to continue posing a threat
to local operators over the period.
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Industry Performance
Key External Number of poker and gaming machines

Drivers Casinos offer a range of electronic gaming services, including poker and gaming
machines. Poker and gaming machines require a gaming machine entitlement to
own and operate. A rise in the number of poker and gaming machines typically
increases revenue for industry operators. The number of poker and gaming
machines is expected to fall slightly in 2019-20, potentially threatening a key source
of revenue for the industry.
Total tourist visitor nights

Trends in domestic and international tourism are important for casino operators, as
tourists represent a significant source of demand for both gaming and
accommodation. Trends in high-end tourism are particularly important, as high net
worth patrons account for a significant share of industry revenue. Demand for
casinos generally rises when total tourist visitor nights increase, providing an
opportunity for industry operators. Total visitor nights are expected to fall in
2019-20, as COVID-19 travel restrictions prevent overseas visitors from entering
Australia.
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Per capita gambling expenditure

Overall per capita gambling expenditure significantly influences industry revenue, as
casino gaming represents a substantial proportion of total gambling activity. A rise
in per capita gambling expenditure positively affects industry revenue and typically
drives greater gambling activity at casinos. Per capita gambling expenditure is
expected to fall in 2019-20 due to COVID-19 social distancing measures, the closure
of some non-essential businesses and services, and travel restrictions for overseas
visitors.
Real household discretionary income

The Casinos industry is sensitive to changes in household discretionary income. A
rise in discretionary income generally allows patrons to spend more money on non-
essential activities such as gambling, which positively affects industry operators.
Real household discretionary income is expected to fall in 2019-20, as
unemployment rises due to the economic impact of the COVID-19 outbreak.
Current A decline in VIP program play at Crown Resorts has been a

Performance significant factor driving revenue declines in the Casinos industry
over the past five years.
In addition, falling discretionary incomes over the period have led to consumers
reducing non-essential activities, such as casino gaming, and overall gambling
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expenditure. Premium and VIP gambler visits, particularly from international

tourists, fell sharply in 2016-17 and VIP turnover at Crown has yet to fully recover.
Competition from international casino destinations, such as Macau, Singapore and
other parts of Asia, has also intensified over the past five years. Increasing
competition from these international casinos and from online gambling platforms
has caused industry players to heavily invest in development and refurbishment
projects over the period. Furthermore, the COVID-19 outbreak and the subsequent
closure of casinos around Australia have led to a significant dip in industry revenue
in the current year. Overall, industry revenue is expected to decline at an annualised
7.4% over the five years through 2019-20, to $4.5 billion.
Revenue and profitability
A decline in the VIP program segment has been the most significant
factor behind falling industry revenue over the past five years.
Industry operators have also faced increased competition from online gambling and
casinos over the period. Over the first half of 2019-20, prior to the temporary
closures associated with COVID-19, Crown Resorts was expected to record growth
in its VIP program play segment, but this was largely due to an unusually high win
rate, with VIP turnover falling by 34.2% across its Australian casinos. In contrast,
Star Entertainment Group is anticipated to report a decline in its VIP rebate
business due to an unusually low win rate, despite VIP turnover rising by 2.0% over
the same period. Economic growth in China also began to slow, before the
COVID-19 outbreak emerged at the start of 2020 and led to fewer travellers visiting
from mainland China over the Lunar New Year period. In 2019-20, industry revenue
is anticipated to sharply decline by 27.4%. This fall is due to social distancing
measures, restrictions on non-essential businesses and travel restrictions placed
on overseas visitors, which have severely affected casino operations across
Australia.
Casino operators continue to report strong profit margins, but industry profitability
has fallen over the past five years as VIP turnover has declined. The temporary
closure of casinos has particularly limited industry profitability in 2019-20. Profit
has also fallen as major operators have undergone refurbishment projects and
undertaken greater marketing activity over the past five years. Industry operators,
particularly larger players, have sought to reduce other costs, and continue
improving productivity and efficiency over the period. Casino profit margins are
generally volatile and typically fluctuate in relation to the win rates of premium and
VIP gamblers who place high-stakes wagers.
Industry structure
Nine enterprises operate 13 casinos in Australia, with at least one

establishment in each state and territory.
Some state governments, such as South Australia, only issue one table gaming
casino licence. This practice effectively gives the company that owns the licence a
regional monopoly on casino gaming services. Other state governments issue
multiple licences, but only allow one casino to operate per major region. For
example, Queensland has four casinos operating in four areas (Brisbane, Cairns,
Townsville and the Gold Coast).
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Seven enterprises operated in the industry before The Star Entertainment Group
(formerly Echo Entertainment Group) sold its Townsville Jupiters casino to Colonial
Leisure Group for $70.0 million in October 2014. The industry's strict licensing and
regulatory requirements have kept establishment numbers stable over the past five
years. The number of industry enterprises increased by one in 2014-15, following
The Star Entertainment Group's sale of Jupiters. In 2014, Aquis Entertainment
replaced Casinos Austria as the operator of Casino Canberra, although Casinos
Austria remains a joint owner of the Reef Hotel Casino through the ASX-listed Reef
Casino Trust. Delaware North, a US-based company, also acquired SKYCITY's
Darwin Casino in November 2018 and renamed it Mindil Beach Casino Resort.
Crown Resorts and The Star Entertainment Group operate five of the industry's
casinos and generate just under 90% of total industry revenue. Both companies
have sought to further consolidate their industry dominance over the past five years
by significantly refurbishing their existing casinos to attract VIP clients from Asia.
Completed developments, such as Crown Towers Perth, offer greater hospitality
and customer service, encouraging new customers and increasing retention rates
for existing patrons. Crown Resorts and The Star Entertainment Group also greatly
benefited from their expansion projects in 2014-15, increasing patron numbers and
contributing to industry revenue growth of 16.3% for that year.
Competition
Industry operators have faced growing competition from

international and online casinos over the past five years.
New casinos have opened in Asia over the period, making it increasingly difficult for
local casinos to attract VIP players from the region. Casinos typically offer
incentives, subsidies and gaming packages to premium patrons, encouraging them
to gamble at Australian casinos. Incentives usually include free travel tickets, food,
beverages, entertainment tickets, transport and accommodation. Industry operators
typically recoup the cost of these incentives through the large wagers placed by VIP
gamblers. While VIP gamblers wager at a lower frequency, this is offset by the high
value of spending, despite them typically being more skilled at casino games. Both
of the industry's major players have focused on refurbishment projects to attract
and retain VIP players from the Asia-Pacific region over the past five years.
However, legal issues regarding gambling promotion in China resulted in a strong
decline in VIP program play at Crown in 2016-17.
Historical Performance Data

Year Revenue IVA Estab. Enterprises Employment Exports Imports Wages Domestic
Demand
($m) ($m) (Units) (Units) (Units) ($m) ($m) ($m) ($m)
2011–12 5,314 2,811 13 7 22,904 N/A N/A 1,497 N/A
2012–13 5,647 2,953 13 7 23,841 N/A N/A 1,592 N/A
2013–14 5,663 2,973 13 7 23,131 N/A N/A 1,599 N/A
2014–15 6,585 3,472 13 8 26,400 N/A N/A 1,837 N/A
2015–16 6,781 3,550 13 8 26,411 N/A N/A 1,837 N/A
2016–17 6,197 3,495 13 8 27,177 N/A N/A 1,822 N/A
2017–18 6,583 3,424 13 8 27,590 N/A N/A 1,851 N/A
2018–19 6,172 3,401 13 9 28,209 N/A N/A 1,913 N/A
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Demand
2019–20 4,480 2,289 13 9 28,878 N/A N/A 1,348 N/A
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Industry Outlook
Outlook The Casinos industry is forecast to rebound from the COVID-19
downturn over the next five years, returning to growth with the
addition of Crown's new Barangaroo casino and the redevelopment
of Queen's Wharf and the Treasury Casino.
However, casinos in Macau and
Singapore are anticipated to limit
demand for local gambling services
from wealthy VIP gamblers in Asia
over the period. Ongoing competition
from these overseas casinos, online
casinos and other local wagering
services, such as online sports
betting and gaming machines in
pubs, are also anticipated to place
pressure on local casino operators
over the next five years.
Revenue and profitability
Industry revenue is forecast to increase at an annualised 8.5% over

the five years through 2024-25, to $6.7 billion.
The current industry downturn is anticipated to extend into 2020-21, due to
prolonged restrictions on international travel to Australia and casino operations
likely remaining limited as social distancing measures remain in place. However,
the industry is anticipated to recover over the next five years, as the government
relaxes restrictions and more international VIP and premium gamblers visit Crown
Resorts' new casino at Barangaroo, Sydney, and the redevelopment of Queen's
Wharf in Brisbane. These factors are projected to support growth in industry
revenue and profitability over the next five years. However, casinos will require
greater staffing numbers as it targets VIP players and increases its focus on
customer service. Crown's restricted licence in its Barangaroo development also
does not allow for poker machines, which increases the labour requirements of the
establishment. As a result, wage costs are likely to remain high over the next five
years, constraining profit margin growth. Future changes to profit margins will also
depend on patrons' win rates.
Discretionary incomes are projected to rise over the next five years, increasing the
amount of money people have to spend on casino gaming. However, the number of
poker and gaming machines is anticipated to fall steadily over the period, partially
offsetting these revenue gains. Demand from China is also expected to slow due to
weaker economic growth in the country, potentially threatening demand from one
of the industry's key markets. Industry operators will also likely face increasing
competition from online casino and gambling platforms, as they become
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increasingly prominent. However, an overall rise in tourist numbers is projected to

support expenditure on industry services over the next five years.
Casino developments
The industry's structure is anticipated to change significantly over

the next five years.
Crown Resorts' new casino at Barangaroo will be the first new casino built in
Australia since the late 1990s. The new $2.0 billion resort, which will only provide
services to premium and high-stakes gamblers, was originally planned to open in
November 2019, but has been pushed back to December 2020. In August 2014, the
New South Wales Independent Liquor and Gaming Authority granted Crown Resorts
a restricted gaming licence. Under this licence, the new casino cannot provide
electronic gaming or poker machine gambling services. As a result, the Barangaroo
facility will target VIP players, who typically place high-stakes wagers on live table
games.
Crown Resorts and The Star Entertainment Group also competed for the rights to
redevelop the Treasury Casino for the Queen's Wharf project in Brisbane's CBD. In
July 2015, the Queensland Government announced that The Star Entertainment
Group's bid was successful. The Destination Brisbane Consortium is a venture that
includes The Star Entertainment Group, Far East Consortium Australia and Chow
Tai Fook Enterprises. Construction has already begun on the Queen's Wharf
redevelopment, which includes replacing the current Treasury Brisbane casino. The
redevelopment is anticipated to be completed in 2022.
Competition
New casino developments throughout Asia and Eastern Europe are

forecast to shape the industry's competitive landscape over the next
five years.
Both Crown Resorts and The Star Entertainment Group have expanded their non-
gaming facilities to appeal to wealthy tourists. However, competition from casinos
in Singapore and Macau could constrain potential growth in Australian casino
tourism due to their proximity to other Asian countries. In addition, competition for
domestic and international VIP players is projected to remain intense over the next
five years. Local players will also be increasingly competing with online casino and
gambling operators.
Performance Outlook Data

Demand
2020–21 4,534 2,444 14 9 29,402 N/A N/A 1,344 N/A
2021–22 6,494 3,491 14 9 30,040 N/A N/A 1,929 N/A
2022–23 6,383 3,420 14 9 30,344 N/A N/A 1,922 N/A
2023–24 6,499 3,462 14 9 30,636 N/A N/A 1,943 N/A
2024–25 6,722 3,567 14 9 30,891 N/A N/A 2,006 N/A
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Industry Life Cycle The life cycle stage of this industry is Mature
LIFE CYCLE REASONS

Industry value added is expected to rise over the next five years
The Australian market is saturated with casinos and other forms of gambling
Major players are building or development new and existing sites in response to strong
competition from overseas
The Casinos industry is in the mature stage of its economic life cycle. Industry
value added (IVA), which measures an industry's contribution to the overall
economy, is forecast to rise at an annualised 0.3% over the 10 years through
2024-25. This represents an underperformance of overall GDP, which is projected to
rise at an annualised 2.0% over the same period. The opening of the Barangaroo
casino over the next five years is expected to support the overall rise in IVA over the
period.
In addition to the current year economic impact of COVID-19, local operators have
faced increasing competition from overseas casinos, which has led to the decline
of the overall industry over the past five years. Macau is an established and leading
global gambling destination, while Singapore also has two lavish casinos. These
casinos compete fiercely with industry operators for international high rollers and
VIP gamblers due to their proximity to Australia. In response to the fierce
competition, the major domestic operators are in the process of constructing a new
casino and redeveloping existing sites. Over the past five years, industry revenue
has been volatile with fluctuations in the VIP programs of the major operators and
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the temporary shutdown of casinos across the country due to the COVID-19
outbreak. The domestic market has become increasingly saturated despite the
number of industry establishments remaining stable. These trends are all indicative
of mature industry.
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Products and Markets

Supply Chain KEY BUYING INDUSTRIES KEY SELLING INDUSTRIES
1st Tier 1st Tier
Consumers in Australia Telecommunications and Other Electrical
Goods Wholesaling in Australia
International Consumers
Soft Drink and Pre-Packaged Food
Wholesaling in Australia
Liquor Wholesaling in Australia
Catering Services in Australia
2nd Tier
Spirit Manufacturing in Australia
Wine Production in Australia
Products and
Services
Casinos derive most of their revenue from gaming services.

Nearly 80% of industry revenue comes from electronic, table and other types of
gaming. Industry operators also generate revenue from non-gaming products and
services, including food, beverages and accommodation. Revenue generated from
gaming activities often subsidises these products and services, which are generally
of a high standard to attract and retain gambling patrons. Social distancing
measures and restrictions placed on non-essential services have led to the
temporary closure of casinos across Australia, significantly affecting industry
revenue. These closures are anticipated to affect all segments of casino
operations.
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Table gaming
Table gaming is the traditional service that casinos provide and

generate the largest proportion of industry revenue.
These games are generally played on tables with other patrons and operated live by
dealers. Popular table games include poker, roulette, blackjack, baccarat and craps.
Patrons compete against each other in games such as poker, or against the dealer
or house in games such as roulette and blackjack. Table gaming has increased as a
share of industry revenue over the past five years, partly due to declines in the VIP
program segment.
Electronic gaming
Electronic gaming generates the second-largest share of industry

revenue.
Consumers place bets on a range of electronic games such as slot machines, video
lotteries and poker machines. These games are automated and do not require staff
supervision or operation. Several casinos also offer electronic versions of popular
table games such as roulette, poker and blackjack. Electronic gaming has increased
as a proportion of industry revenue over the past five years due to the decline in the
VIP program segment.
VIP program
VIP program makes up a significant segment for the industry.

VIP players tend to play table games as there are often higher or no limits on the
value of wagers and most tend to participate in higher stakes table games.
Accommodation packages are sometimes offered at a discounted price to entice
people to gamble. These packages particularly target VIP gamblers. Some casinos
provide subsidised accommodation packages for international VIP players to entice
them to visit their casino and gamble on high-stakes table games. The VIP program
segment has fallen sharply as a share of industry revenue over the past five years,
largely due to the negative publicity surrounding Crown as they encountered legal
issues for promoting gambling in China. In the current year, the emergence of
COVID-19 initially led to travel restrictions being placed on key visitor markets like
China during the Lunar New Year period, which has further weighed on the
performance of the segment.
Non-gaming and other services
Most casinos also offer non-gaming services like accommodation,

food and beverage services, restaurants, bars and other facilities.
By providing accommodation in close proximity to gaming facilities, operators can
increase the number of people that gamble, helping to boost overall revenue.
Industry operators also sell food and beverages to attract patrons to their casinos
and retain existing customers. Food and beverages are provided on the casino floor,
and most casinos have restaurants and bars onsite to draw in visitors. Casinos
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have sought to attract new patrons by increasingly offering high-quality dining and
hospitality services over the past five years. The non-gaming and other services
segment has increased as a share of industry revenue over the past five years with
the overall increase in tourist visitor nights and the opening of Crown Towers Perth.
However, this segment has been weighed down by travel restrictions implemented
following the COVID-19 outbreak.
Demand The size of the local population and household discretionary income
Determinants determine demand for industry products and services, as most
casino patrons are from local areas.
Fluctuations in discretionary income and consumer sentiment have a significant
effect on household expenditure on entertainment and gambling. Consumers are
more likely to spend money on gambling activities and related services when
discretionary income is higher. In times of lower discretionary income and weak
consumer sentiment, gamblers have a tendency to save on food and beverage
expenditure in casinos.
Premium domestic players and premium international players are also extremely
important for industry operators, as they can have a drastic effect on casino
revenue and profitability, irrespective of whether they win or lose. However, a heavy
reliance on international or domestic premium players from any particular
geographic market or specific country can place a casino's revenue and overall
profitability at risk. Demand also varies according to different casino activities.
Patrons that play electronic gaming machines tend to make a high number of small-
stakes wagers, outlaying small amounts. In contrast, table games tend to attract
more professional and high-stakes players that outlay high amounts, but at a low
frequency. Trends in tourism also dictate demand for industry services. A greater
number of visitors into the country is likely to increase the number of patrons, while
also driving greater demand for accommodation services provided by industry
operators. The COVID-19 outbreak in the current year has significantly limited the
number of casino patrons as restrictions on non-essential services have led to the
closure of casino operations. Furthermore, restrictions on overseas visitors is
expected to significantly hamper the performance of the industry over the next year,
even as domestic measures and restrictions are relaxed.
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Major Markets
Casinos attract a range of gamblers that can be divided into local patrons and
international visitors. These markets are segmented by the amount of revenue they
contribute rather than by the number of patrons that visit casinos. The temporary
closure of casinos across Australia due to the COVID-19 outbreak is expected to
weigh significantly on both markets over the current year.
Local patrons and interstate visitors
Local patrons from the home state and interstate visitors from other states and
territories represent the largest market for casinos. Local patrons are defined as
consumers that gamble at casinos in their home state, while interstate visitors are
travellers from other states and territories. Over 80% of total gamblers at casinos
are estimated to be local patrons, but revenue generated from this market is
proportionately lower due to the relatively smaller wagers placed compared with
other markets. A large proportion of revenue generated from this market is from
gaming activities and food and beverage products, rather than accommodation.
Interstate patrons are estimated to account for the smallest portion of industry
revenue as they tend to gamble at local casinos rather than travel to interstate
facilities. However, consumers that do travel interstate generally stay at the casinos
where they gamble, which results in greater revenue from accommodation and food
and beverages. Over the past five years, this market has increased as a proportion
of revenue due to the sharp decline in the international visitors market in 2016-17.
International visitors
International visitors contribute a significantly higher proportion of revenue

compared with its share of total casino patrons. While international visitors make
up only a small proportion of total casino patrons, they tend to play higher stakes
games and spend more money on food and beverages than domestic patrons. In
addition, this market tends to use the accommodation at the casinos where they
are gambling as they have travelled from overseas, providing another source of
revenue for industry operators. This market also comprises VIP guests that gamble
on high-stakes poker, baccarat and blackjack games. The international visitors
segment has declined as a share of industry revenue over the past five years with
Crown's revenue from its VIP program play plummeting in 2016-17 following several
of its employees being jailed in China for promoting gambling illegally. Revenue
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generated from international visitors in its hotel and accommodation business have
helped to slightly curb the decline from this market over the past five years, but
restrictions on overseas visitors due to the COVID-19 outbreak are anticipated to
cause this segment to decline significantly as a share of industry revenue over the
current year and overall over the past five years.
International Exports in this industry are Low and Steady

Trade
Imports in this industry are Low and Steady
Most casino visitors are from the local population, but these are usually small-
stakes gamblers. Industry operators must therefore provide facilities for high-
stakes VIP and premium gamblers from both Australia and overseas, particularly
from developing countries in South-East Asia. Casino gambling is illegal in China
and many VIP gamblers from China travel to nearby casinos in Macau, Australia and
other parts of Asia to gamble. Appealing to these patrons requires active marketing
through agents and representative offices, which are heavily regulated in China.
However, as casinos provide gaming and betting services domestically,
international trade is not applicable to the industry and this trend has remained
steady over the past five years. The number of casino patrons from overseas is
expected to be severely limited in 2019-20 and 2020-21, as the Federal Government
has placed restrictions on overseas visitors due to the risks posed by the COVID-19
outbreak.
23 IBISWorld.com
Business
Locations Business Concentration in Australia
NT
QLD
WA
SA
NSW
ACT
VIC
Percentage of Establishments (%)

TAS
0 20 40 60
Casinos in Australia
Source: IBISWorld
The locations and geographic distribution of casinos are largely determined by the
various state governments. These governments grant the gaming licences that
allow companies to operate casinos in the respective states and territories.
Currently, all states and territories have at least one casino. Establishment
distribution is more concentrated in states and territories with small populations,
with two casinos operating in both the Northern Territory and Tasmania.
Queensland has the largest concentration of casinos, with four establishments
located in Brisbane, the Gold Coast, Townsville and Cairns.
Only one casino operates in South Australia and the South Australian Government
has signalled that it will not issue another table gaming licence, which effectively
gives SKYCITY a regional monopoly in this state. Victoria and New South Wales
also only have one casino, but Crown Casino Melbourne and The Star Sydney
generate a large proportion of industry revenue given their larger population and
appeal as tourist destinations. Establishment locations have remained unchanged
over the past five years. However, Crown Resorts is developing a new casino in
Barangaroo, Sydney, which is set to open in December 2020.
24 IBISWorld.com
25 IBISWorld.com
Competitive Landscape
Market Share Concentration in this industry is High
Concentration
The Casinos industry is characterised by a
high market share concentration. Together,
the two largest companies account for just
under 90% of industry revenue. These two
companies operate five of the industry's 13
casinos, with plans to develop and operate
more. Crown Resorts generates just over
half of the industry's total revenue through
its two casinos in Melbourne and Perth.
The company has significantly developed
and refurbished its existing casinos, hotels
and entertainment facilities over the past
five years. The Star Entertainment Group
has increased its market share over the
past five years, despite selling its Jupiters
casino in Townsville to Colonial Leisure
Group in October 2014. Overall, market share concentration has remained stable at
a high level over the period. Market share concentration is expected to increase
when Crown's construction of its new casino at Barangaroo and Star Entertainment
Group's Queen's Wharf redevelopment reach completion.
Key Success IBISWorld identifies 250 Key Success Factors for a business. The most important for this
Factors industry are:
Proximity to key markets: Casinos located in highly populated areas or areas with a
significant number of domestic and international visitors can benefit from higher foot traffic
and revenue.
Having a wide and expanding product range: Successful casinos provide a variety of
electronic gaming machines and table games. Introducing new games or facilities increases
the number of potential revenue streams.
Qualified work force: Casinos need to employ a range of qualified staff that can operate
live table games, serve food and beverages, and provide hospitality services. High-quality
service helps retain customers.
Ability to effectively manage risk: Companies need to monitor and manage the risks
involved with operating casinos, particularly for VIP players that place high-stakes wagers.
Managing these risks can ensure a steady stream of revenue and stable profit margins.
Close monitoring of competition: Due to the industry’s high concentration, operators

need to monitor and keep track of their competitors to stay competitive and attract new
customers.
26 IBISWorld.com
Cost Structure
Benchmarks
Profit
Casinos are generally highly profitable and have

strong profit margins, but profitability varies
based on how patrons gamble and their win
rates. High-stakes gamblers can also
significantly affect overall casino profitability, as
their wagers are large. Changes in the number
of high-stakes gamblers and their win rates
make profitability volatile for industry operators.
Industry profitability has declined over the past
five years, with higher wages as a share of
revenue, lower win rates and weaker turnover in
VIP gaming. Profit has been further dragged
down by the COVID-19 outbreak in the current
year, which has led to the temporary closure of
casinos across Australia and upward pressure
on several major expenses for industry
operators.
Wages
Wages represent a substantial cost for casino

operators. Most establishments operate
between 18 and 24 hours per day, and provide
extensive customer service and hospitality. Staff
are required to constantly operate and supervise
live table games, such as blackjack, poker and
roulette. Operators also require employees to
provide other services, such as cleaning,
maintenance, security and management. Wage
costs have increased as a share of industry
revenue over the past five years, due to
increased staffing requirements. During the
27 IBISWorld.com
COVID-19 outbreak, the major players have

stood down at least 90% of their staff, as the
majority of their operations have temporarily
ceased.
Purchases
Casinos purchase food and beverage products

that are onsold to patrons or prepared for
resale. Many purchases are used to
complement the industry's main gaming
services. Other purchases include items that are
used in the accommodation services provided
by industry operators, such as toiletries.
Purchase costs have increased slightly as a
share of industry revenue over the past five
years. The rise can be attributed to operators
increasing their service standards, particularly
by offering higher quality food and beverage
services to attract more international patrons.
Depreciation
Industry firms require a significant amount of

capital to build, maintain and refurbish casinos.
Due to the industry's competitive nature, firms
must regularly refurbish and improve existing
facilities, and keep technology up to date.
Casino floors, hotels and electronic gaming
machines all require substantial capital
investment. Depreciation expenses have
increased as a share of industry revenue over
the past five years, due to several refurbishment
projects on Crown Resorts' and The Star
Entertainment Group's existing casinos and
hotels.
28 IBISWorld.com
Other Costs
Other costs incurred by industry operators

include licensing fees, marketing, administrative
services, insurance, maintenance costs,
professional service expenses, taxes and levies.
Licence fee payments are often ongoing
expenses as licences can be amended regularly.
Industry operators use marketing and
advertising campaigns to entice patrons to
gamble and stay at casinos. Attracting and
retaining international VIP players and tourists is
crucial to the success of industry enterprises
and these costs have risen over the past five
years. State and federal taxes and levies that
governments charge on gambling services are a
significant expense for industry operators.
Gaming taxes differ among state and territory
governments, and by the type of gaming being
taxed. Other costs have declined as a share of
industry revenue for most of the past five years,
as larger operators have improved their
efficiency and productivity. However, this trend
is expected to reverse in the current year, as
COVID-19 social distancing measures and
restrictions have caused revenue to sharply
decline.
Basis of Competition in this industry is Medium and Increasing

Competition
The Casinos industry is characterised by a moderate level of
competition, which has increased over the past five years.
Companies that operate casinos face competition from a range of internal and
external factors.
29 IBISWorld.com
Internal competition
Internal competition occurs based on the products, services,

facilities and packages offered by industry operators.
Casinos also compete on incentives, exclusive facilities and customer service
provided to VIP and premium gamblers. The ambience of the gaming rooms and
the quality of hotels, restaurants, food, drinks and entertainment affect the number
of new patrons that attend casinos and the retention rates of existing clients.
However, local gamblers generally cannot easily switch to other casinos due to the
regional monopolies held by some casinos. Only Queensland has more than two
casinos, but even these establishments are not located in close proximity. Changes
in service quality and range therefore do not significantly affect customers during
their stay compared with other industries. However, poor service may result in
customers travelling to other casinos on future trips.
External competition
Casinos compete externally with online casinos, overseas casinos

and other forms of gambling like horse and sports betting.
Online gambling and betting websites have become increasingly popular over the
past five years due to their convenience and accessibility. Australian firms also
compete with companies that operate casinos within the region in countries like
Macau, Singapore and Malaysia, particularly for high-stakes international VIP and
premium players. These gamblers are generally more skilled and place extremely
large wagers. Travelling expenses generally do not deter these gamblers from
seeking the best gaming destinations.
Barriers to Entry Barriers to entry in this industry are High and Steady
The Casinos industry is characterised by

high barriers to entry. Several key Barriers to entry checklist
factors such as regulation, the Competition Medium
dominance of existing players, capital
Concentration High
investment requirements and licence
fees restrict new enterprises from Life Cycle Stage Mature
entering the industry. Casinos operate
Technology Change High
under very strict legislative and
regulatory conditions. In all states and Regulation & Policy Heavy
territories, legislative bodies regulate
Industry Assistance Low
and oversee the operation of casinos
and licensing requirements. These
authorities also restrict the number and location of casinos. Entry into the industry
is usually via a government tender for a licence. The successful operator is then
offered an exclusive clause for a period of 15 to 20 years, where no other casino
licences are issued by the government in a defined geographic area.
The industry's high market share concentration illustrates the dominance of the
existing players. The industry's two largest players, Crown Resorts and The Star
30 IBISWorld.com
Entertainment Group, alone account for just under 90% of industry revenue. It is
extremely difficult for new firms to gain the new patronage required to cover initial
capital investment costs and licence fees. The new Barangaroo casino is set to
open in December 2020, but is owned and operated by Crown, highlighting the
difficulty in entering the industry. The main way that several companies have
entered the industry is through acquiring an existing casino that already has an
established client base. Barriers to entry have remained steady over the past five
years, as existing regulation, major player dominance and capital investment
requirements have been well established for many years.
Industry Globalization in this industry Medium and Steady

Globalization
The Casinos industry is characterised by a moderate level of globalisation, which
has remained steady over the past five years. Industry operators generate a
significant amount of revenue from international VIP gamblers. Domestic operators
have therefore been heavily gearing their operations towards prospective tourist
markets, rather than focusing solely on domestic patrons. Industry players have
benefited from rising discretionary incomes in Asia, particularly in China. However,
the strength of casinos in Macau and Singapore has curbed the number of tourists
that have gambled at Australian casinos.
Domestic and international casino operators also often have investments that span
several countries. The industry's largest player, Crown Resorts, has operations in the
United Kingdom, and previously had interests in casinos in the United States, but
exited its US ventures to focus on its Australian resorts. The industry also has
moderate foreign ownership. SKYCITY is based in New Zealand, while international
group Casinos Austria, which previously owned Casino Canberra, remains a joint
owner of the Reef Hotel Casino in Cairns. In addition, Darwin's SKYCITY Casino was
also recently sold to Delaware North, a US-based company, in November 2018.
Furthermore, the current owners of Casino Canberra and Alice Springs Casino,
Aquis Entertainment and Lasseters International, are both owned by foreign
companies. Melco previously held a stake of about 10% in Crown, before this was
sold to Blackstone Group in April 2020.
31 IBISWorld.com
Major Companies
Major Players CROWN RESORTS LIMITED
Market Share: 46.9%

Crown Resorts Limited is a publicly listed
Australian entertainment group that operates
businesses in the gaming and entertainment
sector. The company was formed in
November 2007 after Publishing and
Broadcasting Limited split its gaming assets
into a new entity. Crown Resorts owns and
operates casinos in Melbourne and Perth. The
company also has other gaming investments
in the United Kingdom and the United States.
In July 2014, the New South Wales
Independent Liquor and Gaming Authority issued Crown Resorts with a restricted
gaming licence for its planned hotel resort in Barangaroo, Sydney. Originally
planned to open in November 2019, the Barangaroo casino is now scheduled to
open in December 2020. The company offloaded its stake in Asian gaming
company Melco in 2016-17, while also announcing its decision not to proceed with
its Alon project in Las Vegas. In February 2018, Crown Resorts sold also its 62.0%
stake in CrownBet for a reported $150.0 million. These decisions highlight a shift in
the firm's focus to its core operations in Australia.
32 IBISWorld.com
Crown Resorts operates in the industry through its casinos in Melbourne and Perth,
which account for nearly half of the industry's total revenue. The company has
refurbished its existing casinos and made plans for new developments to attract
more VIP gamblers over the past five years. In Perth, the company rebranded two
hotels to Crown Metropol and Crown Promenade, before adding Crown Towers,
which was completed December 2016. In addition to developing its Barangaroo
casino and One Barangaroo apartments, Crown Resorts also bought the remaining
50.0% stake in the One Queensbridge development site adjacent to its Melbourne
casino.
Financial performance
Crown Resorts' industry-specific revenue is expected to fall at an annualised 8.1%

over the five years through 2019-20, to $2.1 billion. The company's casino
operations are expected to be significantly affected by the cessation of its gaming
activities and other services that have been deemed non-essential by federal and
state governments due to the COVID-19 outbreak. The company has invested
significantly in developing its casino complexes as international destinations over
the past five years. Industry-related revenue grew strongly in 2014-15, due to
increased main floor gaming revenue in Melbourne and Perth. However, this growth
was offset by a decline in the VIP program play, which nearly halved in 2016-17 due
to controversy surrounding its employees illegally promoting gambling in China. As
a result, Crown Resorts has underperformed the overall industry over the past five
years. The significant drop in VIP program play has driven down profitability for
Crown Resorts' casino operations over the period.
Crown Resorts Limited - industry segment performance*

Year Revenue Growth
($b) (% change)
2009-10 2.29 N/C
2010-11 2.41 5.2
2011-12 2.63 9.1
2012-13 2.78 5.7
2013-14 2.81 1.1
2014-15 3.21 14.2
2015-16 3.23 0.6
2016-17 2.82 -12.7
2017-18 3.12 10.6
2018-19 2.95 -5.4
2019-20 2.10 -28.8
Source: IBISWorld
Note: *Estimate
33 IBISWorld.com
THE STAR ENTERTAINMENT GROUP

LIMITED
Market Share: 42.9%

The Star Entertainment Group Limited,
formerly known as Echo Entertainment Group,
is a publicly listed Australian company that
operates a range of hospitality, dining,
nightlife and gaming businesses. The
company was formed in June 2011, after
Tabcorp Holdings split its casino operations
from its other gambling and betting segments.
Echo Entertainment Group was rebranded to
The Star Entertainment Group in November 2015. The company operates three
casinos in Australia and is headquartered in Brisbane.
The Star Entertainment Group operates in the industry through its three casinos,
which include The Star Sydney, The Star Gold Coast and Treasury Casino in
Brisbane. The group previously owned the Jupiters Townsville casino (now known
as The Ville) in Townsville, QLD, but sold the casino to Colonial Leisure Group for
$70.0 million in 2014. In July 2015, the Queensland Government announced that
The Star Entertainment Group had won the bid to redevelop Queen's Wharf in
Brisbane's CBD, in conjunction with Far East Consortium Australia and Chow Tai
Fook Enterprises. The three companies, known as the Destination Brisbane
Consortium, won the bid over Crown Resorts. The development plan for Queen's
Wharf, which will include the Treasury Casino, was approved in December 2017 and
is scheduled for completion in 2022. The company is also involved in developing
the Dorsett Hotel and Star Residences on the Gold Coast, as part of the Destination
Gold Coast Consortium. The hotel is expected to be completed in 2022.
Financial performance
The Star Entertainment Group's revenue is expected to fall at an annualised 3.2%

over the five years through 2019-20, to $1.9 billion. The group is anticipated to
record a sharp decline in revenue in the current year due to the COVID-19 outbreak
and the temporary closure of its casino and related operations. However, it is
expected to outperform the overall industry over the period. The company has
focused on refurbishing its Sydney casino over the past five years, and is involved in
developments in Brisbane and Cold Coast as it seeks to attract greater local and
international patronage. The group's strong focus on attracting international VIP
guests has contributed to the group's outperformance of the overall industry over
the past five years. Despite selling the Jupiters Townsville casino to Colonial
Leisure Group in October 2014, the group's revenue grew significantly in 2014-15
due to successful marketing campaigns and an increase in the number of
international VIP gamblers. The company's profitability has fallen over the past five
years, due to weaker win rates in 2017-18 and the current year. The decline in
profitability is anticipated to be further exacerbated by social distancing measures,
restrictions on non-essential services and travel restrictions on overseas visitors
implemented following the COVID-19 outbreak in 2019-20.
34 IBISWorld.com
The Star Entertainment Group Limited - financial performance

Year Revenue Growth
($b) (% change)
2009-10 1.45 N/C
2010-11 1.65 13.8
2011-12 1.69 2.4
2012-13 1.85 9.5
2013-14 1.90 2.7
2014-15 2.26 18.9
2015-16 2.36 4.4
2016-17 2.43 3.0
2017-18 2.58 6.2
2018-19 2.51 -2.7
2019-20 1.92 -23.5
Source: Annual Report and IBISWorld
Note: *Estimate
Other Players The Casinos industry's two major players are expected to account for just under
90% of total revenue in the current year. The seven remaining industry enterprises
are significantly smaller and tend to be located in areas with smaller populations
and less economic activity. The other companies that operate in the industry are
SKYCITY Entertainment Group, Mulawa Holdings through the Federal Group,
Colonial Leisure Group, Reef Casino Trust, Aquis Entertainment, Lasseters
International and Delaware North. Colonial Leisure Group entered the industry
following its acquisition of The Star Entertainment Group's Jupiters casino in
Townsville, QLD, in October 2014. Reef Casino Trust is jointly owned by Casinos
Austria International and Accor Casino Investments. Aquis Entertainment entered
the industry through its purchase of Casino Canberra from Casinos Austria
International in August 2015. Lasseters International operates a casino in Alice
Springs, while Delaware North acquired the SKYCITY Darwin Casino in November
2018.
SKYCITY ENTERTAINMENT GROUP LIMITED
Market Share: 2.4%

SKYCITY Entertainment Group Limited is a New Zealand public company that
operates entertainment and gaming businesses and is dual-listed in Australia and
New Zealand. The company's New Zealand casinos are located in Auckland,
Hamilton and Queenstown, while its Australian casino is located in Adelaide. The
company was founded in 1996 after it began operating the SKYCITY Auckland
complex, which is the largest casino in New Zealand. The company owns the only
casino licence in South Australia, which effectively gives SKYCITY a state-wide
monopoly on casino operation. In October 2013, the South Australian Government
agreed to a revised regulatory and taxation arrangement with SKYCITY, and
extended its casino licence until 2035. SKYCITY is currently undertaking a $330
million redevelopment of its Adelaide casino. In November 2018, US-based
company Delaware North acquired SKYCITY's Darwin casino for $188.0 million.
35 IBISWorld.com
Operating Conditions
36 IBISWorld.com
Capital Intensity The level of capital intensity is Medium
The Casinos industry exhibits moderate

capital intensity. For every dollar paid as
wages in 2019-20, an estimated $0.29 is spent
on capital investment. Industry operators rely
on casual staff that work at peak times.
Casinos also generally operate between 18
and 24 hours per day, which increases their
labour requirements. The industry, like others
in the hospitality sector, is labour-intensive
due to the emphasis on customer service
across all areas of operation, including
gaming, food and beverage service,
entertainment and accommodation.
Casinos are extremely expensive to construct

due to the space required for gaming
activities, hotels, restaurants and other resort
facilities, some of which include shopping
malls. Electronic gaming machines also
increase capital requirements for casino
operators. In addition, industry operators have
undertaken refurbishments, developments
and property upgrades over the past five
years, which have raised the industry's capital
requirements. The industry's capital intensity has risen over the past five years.
Technology And Potential Disruptive Innovation: Factors Driving Threat of Change

Systems Level Factor Disruption Description
A qualitative measure of barriers to entry.

Fewer barriers to entry increases the
Moderate Ease of Entry Potential likelihood that new entrants can disrupt
incumbents by putting new technologies
to use.
A ranked measure for the number of

Rate of patents assigned to an industry. A faster
Very Low Very Unlikely rate of new patent additions to the
Innovation industry increases the likelihood of a
disruptive innovation occurring.
A measure for the mix of patent classes

Innovation assigned to the industry. A greater
Very Low Very Unlikely concentration of patents in one area
Concentration increases the likelihood of technological
disruption of incumbent operators.
Annualized growth in the number of

enterprises in the industry, ranked against
Very Low Rate of Entry Very Unlikely all other industries. A greater intensity of
companies entering an industry increases
the pool of potential disruptors.
37 IBISWorld.com
Level Factor Disruption Description
A ranked measure of the largest core

Market market for the industry. Concentrated core
Very Low Very Unlikely markets present a low-end market or new
Concentration market entry point for disruptive
technologies to capture market share.
The industry is experiencing a low level of both the rate of new patents and the
concentration of patents in the industry. This creates an environment where the
threat of new technologies driving disruption is low.
Industry operators are exposed to a low rate of new entrants and a moderate level
of entry barriers. This combination of factors creates an environment where entry
trends are not a key threat of disruption.
Major market segments for industry operators are relatively diversified. The spread
of market segments suggests that there are limited entry points other than those
already served my incumbent operators.
The Casinos industry faces a rapidly changing landscape due to the

emergence of online and mobile gambling and betting.
Horse and sports betting operators have grown significantly due to the rising
popularity and uptake of digital wagering through smartphone apps, which has
increased their share of gambling expenditure. Casino operators face further
competition from overseas online gambling and betting websites, which have
become increasingly accessible through smartphone apps. Blockchain technology
is anticipated to assist the industry and the overall gambling sector. New
technologies are expected to make recording payments and transactions more
efficient, while also keeping gambling data more secure. Blockchain technology will
also likely help increase transparency between casinos and gamblers, as records
can be accessed through secure shared ledgers.
The level of technology change is High
The Casinos industry exhibits a high level of technological change.

Casinos implement a range of technological security measures to stop any
gamblers that are caught cheating. Crown Casino Melbourne was involved in a
gambling scam in March 2013, when a patron gained access to security footage
and passed information on to a VIP high roller. Crown reportedly lost $32 million in
the scandal. Security systems include biometric face recognition, Angel Eye card
readers and radio frequency identification (RFID) chips.
Biometric face recognition software scans the faces of patrons as soon as they
enter the casino. High megapixel digital cameras complete the scans and the
results are then compared against the images of any known individuals in the
casino's database. Security personnel are then alerted if any matches are found.
Angel Eye technology digitally reads invisible barcodes on cards used in blackjack,
poker and baccarat. Security staff are then able to confront patrons that are caught
using cards that do not have a barcode. Many casino chips now contain tiny RFID
38 IBISWorld.com
chips, which transmit unique serial identifiers over radio frequencies. Casinos use
RFID reading equipment at gaming tables and cashing booths, which allows venues
to refuse counterfeit chips.
Revenue Volatility The level of volatility is High
Note: Revenue growth and decline reflective of 5-year annualized trend. Y-axis is in
logarithmic scale. Y-axis crosses at long-run GDP. X-axis crosses at high volatility
threshold.
The Casino industry exhibits a high level of revenue volatility.

International premium and VIP gamblers have a significant influence on revenue
volatility. Australia's major casinos have sought to improve their facilities to appeal
to these wealthy overseas patrons, competing against other casinos in Macau,
Singapore and Malaysia. The VIP program segment for casinos has traditionally
been volatile. The rising number of international visitors typically contributes to
growth in this segment, but VIP program play plummeted in 2016-17 after Crown
ran into legal issues surrounding gambling promotion overseas. This factor led to a
decline in revenue in 2016-17 and has contributed to the industry's high level of
revenue volatility over the past five years. Furthermore, social distancing measures,
restrictions on non-essential services and travel restrictions for overseas visitors
due to the COVID-19 outbreak have led to a sharp decline in revenue for operators in
2019-20, further adding to revenue volatility.
Fluctuations in household discretionary income and per capita gambling

expenditure have also contributed to the industry's revenue volatility over the past
five years. Demand for other gambling services also affects demand for the
industry's services and contributes to revenue volatility. Casino operators compete
for a share of consumers' discretionary income and gambling expenditure against a
range of other gaming options. Many consumers, particularly in younger age
groups, have increased their expenditure on online sports betting and gambling
39 IBISWorld.com
platforms over the period. Any increase in other gambling expenditure can limit
demand for casinos and contribute to revenue volatility in the industry.
Regulation & The level of regulation is Heavy and is Steady

Policy
The Casinos industry in Australia operates in a highly regulated
environment.
In all states and territories, casino authorities and government bodies regulate
casinos through comprehensive internal auditing and inspection procedures. These
policies are aimed at stopping any possibility of money laundering or skimming.
Compulsory checks are also completed on people that apply for employment at
casinos as gambling scams often involve the knowledge of casino staff and access
to casino facilities.
Casinos can also only operate after respective state or territory governments grant
approval. Prospective entrants are required to apply for casino licences, but only
one licence is typically allocated per region. For example, the South Australian
Government has stated that it will only issue one table gaming licence in South
Australia, which SKYCITY currently owns. The respective state authorities also
conduct regular reviews of the casinos operating in the state. Regulation in the
industry is therefore heavy and this trend has remained steady over the past five
years.
Modern Slavery Act
The Modern Slavery Act 2018 was passed by the Federal

Government in November 2018 and took effect on 1 January 2019.
The act detailed new reporting requirements for companies with annual turnover of
over $100.0 million. These companies are required to outline their plan in
addressing the risks of modern slavery in their operations and supply chains. The
first reports will be released in 2020 for the 2018-19 financial year. The NSW
Government was also considering a state-based version of the report, which
applied to businesses with an annual turnover of at least $50.0 million. The NSW
Modern Slavery Act 2018 was set to take effect on 1 July 2019, but has been
delayed and has not yet commenced. The Modern Slavery Act is expected to affect
about half of the companies in the Casinos industry. Some large operators, such as
Crown, also operate in foreign jurisdictions where laws relating to modern slavery
apply, such as the UK Modern Slavery Act.
Industry The level of industry assistance is Low and is Steady

Assistance
The Casinos industry does not receive any direct government
assistance, but is represented by industry associations.
40 IBISWorld.com
The level of assistance has been low over the past five years and has remained
unchanged. The industry's licensing practices give firms some indirect assistance.
Licences generally allow for casinos to operate in specific regions for a set period
of time. Industry operators are therefore free from direct competition with other
casinos in a designated geographic area for a specified time period.
Industry operators are represented by the Australasian Gaming Council (AGC). The
AGC is an Australian and New Zealand industry body promoting gambling
education and responsible gambling awareness to support a sustainable gambling
industry. In addition to casinos, the AGC supports hotels, wagering providers and
other gambling-related industries.
41 IBISWorld.com
Key Statistics
Industry Data
Demand
2011–12 5,314 2,811 13 7 22,904 N/A N/A 1,497 N/A
2012–13 5,647 2,953 13 7 23,841 N/A N/A 1,592 N/A
2013–14 5,663 2,973 13 7 23,131 N/A N/A 1,599 N/A
2014–15 6,585 3,472 13 8 26,400 N/A N/A 1,837 N/A
2015–16 6,781 3,550 13 8 26,411 N/A N/A 1,837 N/A
2016–17 6,197 3,495 13 8 27,177 N/A N/A 1,822 N/A
2017–18 6,583 3,424 13 8 27,590 N/A N/A 1,851 N/A
2018–19 6,172 3,401 13 9 28,209 N/A N/A 1,913 N/A
2019–20 4,480 2,289 13 9 28,878 N/A N/A 1,348 N/A
2020–21 4,534 2,444 14 9 29,402 N/A N/A 1,344 N/A
2021–22 6,494 3,491 14 9 30,040 N/A N/A 1,929 N/A
2022–23 6,383 3,420 14 9 30,344 N/A N/A 1,922 N/A
2023–24 6,499 3,462 14 9 30,636 N/A N/A 1,943 N/A
2024–25 6,722 3,567 14 9 30,891 N/A N/A 2,006 N/A
Annual Change
Demand
(%) (%) (%) (%) (%) (%) (%) (%) (%)
2011–12 4.03 -6.09 0 0 3 N/A N/A 4.29 N/A
2012–13 6.27 5.06 0 0 4 N/A N/A 6.37 N/A
2013–14 0.27 0.66 0 0 -3 N/A N/A 0.44 N/A
2014–15 16.3 16.8 0 14 14 N/A N/A 14.8 N/A
2015–16 2.97 2.24 0 0 0 N/A N/A 0.00 N/A
2016–17 -8.62 -1.54 0 0 3 N/A N/A -0.79 N/A
2017–18 6.23 -2.06 0 0 2 N/A N/A 1.56 N/A
2018–19 -6.24 -0.67 0 13 2 N/A N/A 3.38 N/A
2019–20 -27.4 -32.7 0 0 2 N/A N/A -29.5 N/A
2020–21 1.20 6.76 8 0 2 N/A N/A -0.31 N/A
2021–22 43.2 42.9 0 0 2 N/A N/A 43.5 N/A
2022–23 -1.71 -2.05 0 0 1 N/A N/A -0.37 N/A
2023–24 1.81 1.22 0 0 1 N/A N/A 1.06 N/A
2024–25 3.42 3.04 0 0 1 N/A N/A 3.24 N/A
Key Ratios
Year IVA/Revenue Imports/Demand Exports/Revenue Revenue per Wages/Revenue Employees per Average Wage
Employee estab.
(%) (%) (%) ($'000) (%)
2011–12 52.9 N/A N/A 232 28.2 1,762 65,351
2012–13 52.3 N/A N/A 237 28.2 1,834 66,784
2013–14 52.5 N/A N/A 245 28.2 1,779 69,141
2014–15 52.7 N/A N/A 249 27.9 2,031 69,564
2015–16 52.4 N/A N/A 257 27.1 2,032 69,539
2016–17 56.4 N/A N/A 228 29.4 2,091 67,046
2017–18 52.0 N/A N/A 239 28.1 2,122 67,079
2018–19 55.1 N/A N/A 219 31.0 2,170 67,829
2019–20 51.1 N/A N/A 155 30.1 2,221 46,693
2020–21 53.9 N/A N/A 154 29.6 2,100 45,721
2021–22 53.8 N/A N/A 216 29.7 2,146 64,228
2022–23 53.6 N/A N/A 210 30.1 2,167 63,350
2023–24 53.3 N/A N/A 212 29.9 2,188 63,416
2024–25 53.1 N/A N/A 218 29.8 2,207 64,935
42 IBISWorld.com
Additional Resources
Additional Australian Bureau of Statistics
Resources http://www.abs.gov.au
Queensland Government Statistician's Office

http://www.qgso.qld.gov.au
Australasian Gaming Council

http://www.austgamingcouncil.org.au
Industry Jargon PREMIUM DOMESTIC PLAYERS

High net worth gamblers that are Australian citizens.
PREMIUM INTERNATIONAL PLAYERS

High net worth overseas gamblers that gamble large amounts of money in any one session.
TABLE GAMES
Games played in casinos using live dealers, such as poker, roulette and black jack.
Glossary Terms BARRIERS TO ENTRY

High barriers to entry mean that new companies struggle to enter an industry, while low
barriers mean it is easy for new companies to enter an industry.
CAPITAL INTENSITY
Compares the amount of money spent on capital (plant, machinery and equipment) with
that spent on labour. IBISWorld uses the ratio of depreciation to wages as a proxy for capital
intensity. High capital intensity is more than $0.333 of capital to $1 of labour; medium is
$0.125 to $0.333 of capital to $1 of labour; low is less than $0.125 of capital for every $1 of
labour.
CONSTANT PRICES
The dollar figures in the Key Statistics table, including forecasts, are adjusted for inflation
using the current year (i.e. year published) as the base year. This removes the impact of
changes in the purchasing power of the dollar, leaving only the 'real' growth or decline in
industry metrics. The inflation adjustments in IBISWorld’s reports are made using the
Australian Bureau of Statistics' implicit GDP price deflator.
43 IBISWorld.com
DOMESTIC DEMAND
Spending on industry goods and services within Australia, regardless of their country of
origin. It is derived by adding imports to industry revenue, and then subtracting exports.
EMPLOYMENT
The number of permanent, part-time, temporary and casual employees, working proprietors,
partners, managers and executives within the industry.
ENTERPRISE
A division that is separately managed and keeps management accounts. Each enterprise
consists of one or more establishments that are under common ownership or control.
ESTABLISHMENT
The smallest type of accounting unit within an enterprise, an establishment is a single
physical location where business is conducted or where services or industrial operations are
performed. Multiple establishments under common control make up an enterprise.
EXPORTS
Total value of industry goods and services sold by Australian companies to customers
abroad.
IMPORTS
Total value of industry goods and services brought in from foreign countries to be sold in
Australia.
INDUSTRY CONCENTRATION
An indicator of the dominance of the top four players in an industry. Concentration is
considered high if the top players account for more than 70% of industry revenue. Medium
is 40% to 70% of industry revenue. Low is less than 40%.
INDUSTRY REVENUE
The total sales of industry goods and services (exclusive of excise and sales tax); subsidies
on production; all other operating income from outside the firm (such as commission
income, repair and service income, and rent, leasing and hiring income); and capital work
done by rental or lease. Receipts from interest royalties, dividends and the sale of fixed
tangible assets are excluded.
INDUSTRY VALUE ADDED (IVA)

The market value of goods and services produced by the industry minus the cost of goods
and services used in production. IVA is also described as the industry's contribution to GDP,
or profit plus wages and depreciation.
44 IBISWorld.com
INTERNATIONAL TRADE
The level of international trade is determined by ratios of exports to revenue and imports to
domestic demand. For exports/revenue: low is less than 5%; medium is 5% to 20%; and high
is more than 20%. Imports/domestic demand: low is less than 5%; medium is 5% to 35%;
and high is more than 35%.
LIFE CYCLE
All industries go through periods of growth, maturity and decline. IBISWorld determines an
industry's life cycle by considering its growth rate (measured by IVA) compared with GDP;
the growth rate of the number of establishments; the amount of change the industry's
products are undergoing; the rate of technological change; and the level of customer
acceptance of industry products and services.
NONEMPLOYING ESTABLISHMENT
Businesses with no paid employment or payroll, also known as nonemployers. These are
mostly set up by self-employed individuals.
PROFIT
IBISWorld uses earnings before interest and tax (EBIT) as an indicator of a company’s
profitability. It is calculated as revenue minus expenses, excluding interest and tax.
VOLATILITY
The level of volatility is determined by averaging the absolute change in revenue in each of
the past five years. Volatility levels: very high is more than ±20%; high volatility is ±10% to
±20%; moderate volatility is ±3% to ±10%; and low volatility is less than ±3%.
WAGES
The gross total wages and salaries of all employees in the industry.
45 IBISWorld.com
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R9201 Casinos in Australia Industry Report

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R9201 Casinos in Australia Industry Report

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AU INDUSTRY (ANZSIC) REPORT R9201

IBISWorld.com +61-3-9655-3800 info@IBISWorld.com

About This Industry...........................................5 Competitive Landscape...................................26

Industry Definition..........................................................5 Market Share Concentration....................................... 26

Industry at a Glance.......................................... 7 Major Companies............................................ 32

Executive Summary....................................................... 9 Major Players............................................................... 32

Products and Markets..................................... 19 Industry Data................................................................42

• The Casinos industry is expected to face significant disruptions to their operations

About This Industry

Major Players Crown Resorts Limited

The Star Entertainment Group Limited

Main Activities The primary activities of this industry:

The major products and services in this industry:

Non-gaming and other services

RELATED INTERNATIONAL INDUSTRIES

2015-2020 2020-2025 2015-2025

Annual Growth Annual Growth

Revenue Volatility Industry Assistance

Businesses Technology Change

28,878 Industry operators have faced significant competition from

Products & Services Segmentation

25.7% 34.9% 20.5% 18.9%

Electronic gaming Table gaming VIP program Non-gaming and other

Major Players % = share of industry revenue SWOT

Key External Number of poker and gaming machines

Total tourist visitor nights

Per capita gambling expenditure

Real household discretionary income

Current A decline in VIP program play at Crown Resorts has been a

expenditure. Premium and VIP gambler visits, particularly from international

Revenue and profitability

Nine enterprises operate 13 casinos in Australia, with at least one

Industry operators have faced growing competition from

Historical Performance Data

Revenue and profitability

Industry revenue is forecast to increase at an annualised 8.5% over

increasingly prominent. However, an overall rise in tourist numbers is projected to

The industry's structure is anticipated to change significantly over

New casino developments throughout Asia and Eastern Europe are

Performance Outlook Data

LIFE CYCLE REASONS

Products and Markets

Casinos derive most of their revenue from gaming services.

Table gaming is the traditional service that casinos provide and

Electronic gaming generates the second-largest share of industry

VIP program makes up a significant segment for the industry.

Non-gaming and other services

Most casinos also offer non-gaming services like accommodation,

Local patrons and interstate visitors

International visitors contribute a significantly higher proportion of revenue

International Exports in this industry are Low and Steady

Percentage of Establishments (%)

Close monitoring of competition: Due to the industry’s high concentration, operators

Casinos are generally highly profitable and have

Wages represent a substantial cost for casino

COVID-19 outbreak, the major players have

Casinos purchase food and beverage products

Industry firms require a significant amount of

Other costs incurred by industry operators

Basis of Competition in this industry is Medium and Increasing

Internal competition occurs based on the products, services,

Casinos compete externally with online casinos, overseas casinos

The Casinos industry is characterised by

Industry Globalization in this industry Medium and Steady