Casinos make 78.3% of their revenue from the provision of gambling services. This revenue is derived primarily from gaming tables, electronic gaming machines and providing for international VIP program players. Other gaming activities only account for 0.8% of total revenue.
IBISWorld estimates that industry takings from gaming and poker machines and gaming tables in 2010-11 exceeded $1.4 billion each. International programs are estimated to have made about $640 million, while non-gaming-related activities are estimated to have made nearly $1 billion.
Over time, the share of revenue from poker and gaming machines has grown, from about 20% of total revenue a decade ago to nearly one-third currently. The number of machines and linked jackpots has climbed, and marketing of these has increased: Casinos now use special meals, free bus transport and other value-added packages. However, this is under threat, with federal independent MP Andrew Wilkie’s proposed mandatory pre-commitment scheme, which will drive down incentives for casual gamblers to participate, along with reducing problem-gambler expenditure levels.
International VIP program players have also been slowly increasing over time, with Crown and Echo Entertainment Group (as Tabcorp) investing heavily in non-gaming facilities in recent years to build this segment. However, this revenue stream faces strong competition from both Macau and Singapore, which are stronger and closer markets for a mostly Asian clientele.
Crown Limited accounts for 51.1 % market share followed by Echo Entertainment Group Limited (35%) and SKYCITY Entertainment Group Limited (6.9%).
Over the next five years, IBISWorld expects that industry revenue will grow an annualised 1.0% to $5.05 billion in 2016-17. This stagnation is due to the mature stage of industry development, general industry saturation and rising competition from casinos in Asia. There will be ongoing fierce competition from wagering, particularly from sports gambling, and from gaming machines in clubs and pubs. Competition will also arise from the increasing popularity of internet casinos. However, more robust domestic and international economic conditions from 2011-12 are expected to stimulate growth early in the period and delay revenue decline until 2015-16. In 2012-13, revenue is forecast to grow 2.2%.
To purchase IBISWorld’s full report on Australia’s Casino Industry click here.
Andrew Sadauskas is a former journalist at SmartCompany and a former editor of TechCompany.
