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Investor Plans Remake of Townsville Casino

Nov 12, 2014 - by Monica Erdei
Chris Morris will revive the Jupiters casino

Chris Morris will revive the Jupiters casino

Everyone was wondering why Chris Morris would buy a dying casino, but the businessman has big plans for the Jupiters in Townsville.

Founder of Computershare, Morris told reporters his dream was to create an exciting new package for all tourists to enjoy, and Jupiters will play an important role in his plan.

According to the latest gambling news
, he is looking to get more international tourists to come to the Great Barrier Reef, the Daintree and the outback, by building a small resort complete with a gambling venue.

“Having the casino allows you the cash flow to do other things,” he explained.

Australian gambling companies have been targeting mostly Asian high-rollers and Echo Entertainment and Crown Resorts have even fought over a casino spot in Brisbane and a proposed $8 billion casino project in Cairns.

But Chris Morris is planning on focusing his attention and investing all his efforts in Townsville to draw more locals, not just foreign visitors. There are several direct flights to the regional centre and the businessman plans to take advantage of this.

Business Review Weekly: Why Rich Lister Chris Morris bought ‘worst-performing casino in Australia’

The Business Review Weekly has estimated Morris’ fortune at $700 million. The businessman built a reputation by working in the tech industry. He co-founded ASX-listed share registry business Computershare, but nowadays he’s focusing mostly on tourism.

His tourism and entertainment company, Colonial Leisure Group, owns 15 businesses, including a pubs, a brewery on Margaret River and the Daintree Eco Lodge located in north Queensland. With the Jupiters deal sealed, the total amount invested in Queensland over the past three years reaches $100 million.

In addition to these businesses and properties, Chris Morris recently bought an outback cattle station, Mount Mulligan, and owns Orpheus Island Resort plus a Queensland helicopter charter company.

While he opposes the idea of installing pokies in pubs, Morris says offering these gambling machines in casinos is okay, arguing that “people make a conscious decision to go to casinos.”

The Australian businessman doesn’t have much experience in the gambling industry, but he believes the Jupiters casino has “huge potential”, which is why he brought Brad Morgan on board, who recently ran SkyCity Entertainment’s Darwin casino.

The Australian: CLG pays $70m to snap up Jupiters

The private company owned by Chris Morris, the founder of Computershare, has offered $70 million to buy Echo Entertainment’s Jupiters Townsville casino. The deal was struck through ANZ Corporate Advisory.

The price of the casino equates to 10 times its earnings before interest, tax, depreciation and amortization for the previous financial year. The new buyer is looking to invest money in redeveloping the casino, to make it part of a large-scale integrated resort.

John Redmond, managing director at Echo, said: “Recent performance of Jupiters Townsville has been positive. However, given the scale of operations and the size of the local market, we saw more limited expansion opportunities, and therefore strategic fit, with the group’s other assets.”

The company would make an $8 million pre-tax profit on the $70 million sale.

A statement by Colonial Leisure Group added: “We are excited about the opportunities and synergies this acquisition represents. Combining our extensive expertise in hospitality management and ability to further invest, we will develop Jupiters Townsville Hotel and Casino into a leading regional resort, improving the operational and financial performance of the property.”

MyWealth News: International high rollers drive Echo’s earnings higher

According to a financial report released at the end of October, Echo Entertainment said it expects its normalized earnings before interest, tax, depreciation and amortization (EBITDA) to reach between $245 million and $260 million in the first half of the 2015 financial year. The figure reflects a 31% increase from the previous year.

The current financial year has already brought the company a revenue of $216 million, a 78% rise compared to the previous year within its international VIP rebate business, which was “breaking previous records” according to chief executive Matt Bekier. Between 2010 and 2013, Echo’s VIP business has expanded by 224%.

“The positive trading momentum generated in 2H FY14 continues to prevail. We are experiencing good demand in all properties, especially in domestic electronic gaming,” he said.

But Echo has bigger plans in Australia. Taking advantage of the country’s favorable gambling laws, the company recently submitted a proposal to develop a multi-billion dollar resort at Queen’s Wharf Brisbane. Echo was shortlisted for the location along with rival casino developer Crown Resorts.

“In terms of the Brisbane bid, we can’t yet disclose the details of what we are proposing to build, or the scale of the tourism, economic or job-creation benefits to Queensland,” Bekier said. “But let me assure you that we have put forward a responsible offer that delivers a truly iconic precinct.”

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