Queens Wharf Casino to threaten viability of suburban RSL and sports clubs
TWO of the north west’s biggest clubs will be savaged by the new Queen’s Wharf Casino, according to an analysis prepared for the licensed club industry.
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The Queen’s Wharf Casino could put huge financial pressure on several north side clubs.
A Clubs Queensland-commissioned report found 23 Brisbane clubs would be threatened by the huge inner-city gaming venue when it opens in 2022, taking an estimated $37.5 million from them annually.
The Synergies Economic Consulting (SEC) report found the Gaythorne RSL was among seven clubs, including Broncos Leagues Club, at very high risk of having their revenue drop below their costs.
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The Arana Leagues Club, which employed about 120 people in 2018-19, was rated as high risk in the report, with its earnings before interest, tax, depreciation and amortisation (EDITDA) predicted to fall below 12 per cent.
SEC said clubs needed an EDITDA to revenue ratio of at least 12 per cent in order to adequately replace capital, particularly gaming machines, which had an economic life of about 4-5 years.
“For most clubs, a 10 per cent reduction in gaming revenues will lead to a 25 per cent decline in EBITDA. Clubs with margins below 12 per cent are unlikely to be sustainable in the long term,” SEC said.
Neither Gaythorne RSL or Arana Leagues Club responded to invitations to comment.
Other north side clubs at high risk included Norths Devils Leagues Club, Kedron-Wavell Services Club, Geebung Zillmere RSL and Services Memorial Club, Aspley Leagues Club Limited, Aspley Australian Football and Sporting Club and Zillmere Sports Club.
SEC said most gaming machine revenue for clubs came from a small number of high value players.
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These high value customers attend clubs primarily for the purpose of gaming and are less attached to particular gaming establishments than other players, making it financially worthwhile for casinos to target this group in their marketing strategies.
The Star Entertainment Group-owned Queen’s Wharf Casino in the Brisbane CBD will have 2500 poker machines (compared to around 1000 at Treasury Casino).
According to its 2018-19 annual report Arana Leagues Club made a $130,088 profit that financial year.
Its total revenue was $19.47 million, with $11.5m of that from gaming machines. Bingo brought in $377, 286.
It donated $782,290 to the community, with West Arana Hills Rugby League Football Club ($327,887) and Arana Sports ($128,243) the major beneficiaries.
Dozens of schools, clubs and community groups are also listed as recipients.
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