ACCC will not oppose Reef takeover by Aquis

    The Australian Competition and Consumer Commission (ACCC) today announced that it will not oppose the proposed acquisition by Aquis Reef Holdings (Aus) Pty Ltd of the Reef Hotel Casino (Reef Casino) in Cairns. ACCC commissioner Jill Walker said that there was likely to be limited competition between the Reef Casino and the Aquis Resort since, if developed, the Aquis Resort at Yorkey’s Knob “would be of a scale that is unprecedented in Australia. The total expenditure required to develop the first stage alone would be over $5 billion.” The ACCC acknowledged that the Aquis Resort would primarily cater to international VIPs, whereas Reef Casino makes most of its revenue from 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.
    In a stock exchange filing, Reef Casino Trust said its first-half distributable profit declined 12.3 percent because of a project cost of $441,000 (US$410,831) related to the takeover by Aquis Casino Acquisitions and a doubtful debt charge of $250,000.
    The Cairns-based casino company said profit totaled $2.18 million. Stripping out the exceptional items, profit would have been similar to last year’s $5 million, it said. Revenue fell 1.8 percent to $9.8 million.
    The company said its first half is traditionally a slower period for Cairns tourism, but results have also been affected by direct flights to China returning to a seasonal basis, rather than year round and a flat local economy.
    Reef said it was seeking to attract more locals by promoting the resort as the only place to play and was also seeking to boost Chinese visitor numbers under a “Reef by Day, Reef by Night,” strategy.
    In the first-half electronic gaming turnover rose 12.3 percent, while revenue gained 14.8 percent, with both reaching record levels. It said the outlook for the second half is positive, boosted by a reduction in government red tape and the introduction of new games.
    Total table revenue declined 20 percent due to below theoretical win rate of premium play, while the grind rate also dropped on lower visitations. The company said the outlook for this sector is “softer,” with mainland Chinese travel restrictions affecting visitor numbers, as well as the reversion to seasonal direct flights, in and around Chinese New Year.