Echo Entertainment Group has sold its Townsville casino so that it can focus more on its bigger properties.
Casinos operator Echo Entertainment Group is selling its smallest operation, the Jupiters casino in Townsville, to the privately-owned Colonial Leisure Group for $70 million.
Echo expects to make a pre-tax profit on the sale of the Townsville casino of about $8 million, after transaction costs.
Echo operates The Star in Sydney – the company’s biggest casino, the Treasury in Brisbane, Jupiters Gold Coast in southeast Queensland, and Jupiters Townsville in north Queensland.
Colonial Leisure Group operates 15 hotels in Victoria and western Australia, a brewery at Margaret River in Western Australia, and has other assets in north Queensland.
“Recent performance of Jupiters Townsville has been positive,” Echo chief executive John Redmond said on Friday.
“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.”
Echo had said at its annual general meeting in November that it was considering the future of the Townsville casino because there was limited opportunity there to create a large-scale integrated casino-resort.
Mr Redmond said on Friday that Echo was committed to further investment in southeast Queensland where the company is planning to develop Jupiters Gold Coast and Treasury Brisbane into large-scale integrated casino-resorts.
In November, Echo had said it could spend more than $1.5 billion to redevelop Jupiters Gold Coast and the Treasury Brisbane.
The scale of the potential investments would ultimately depend on operating conditions and factors permitting Echo to make an appropriate return on its investment.
Queensland Premier Campbell Newman wants a new casino built in Brisbane to help attract high rollers from Asia and boost the state’s tourism sector.
The Queensland government is also considering the issue of new casino licences elsewhere in the state.
Earlier this month, the Queensland government issued the first Expression of Interest (EOI) documents to parties interested in developing new integrated casino-resorts in Brisbane and elsewhere in Queensland.
Echo’s renewed focus on its Queensland properties comes after the NSW government rejected its proposal to further develop The Star in Sydney in favour of a proposal from billionaire James Packer’s Crown Resorts to develop a new casino and resort at Barangaroo in Sydney.
Shares in Echo were steady at $2.41 at 1557 AEDT.