It has been a long time in the works. Aquis Entertainment bought Casino Canberra in 2014 with a grand vision for its future. A failed partnership with another company combined with ACT’s stringent laws pertaining to gambling prevented much progress. And the pandemic made everything nearly impossible. Aquis is now ready to offload the property to a private investment fund called the Oscars Group.
By Rose Varrelli · Published · Last updated
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Initial Aquis Plans
Aquis Entertainment purchased Canberra Casino in December 2014.
Tony Fung headed up the casino at the time and had been liaising with the Australian Capital Territory (ACT) for more than a year to generate interest in customers. He had obtained population registers from the government to market to them. Of course, there was also outreach to high-stakes players via junkets.
The move that gave Aquis and Fung the most hope of a productive redevelopment was that the ACT government agreed to remove the pokies restriction. Instead of restricting the casino to offering only table games, Canberra Casino would be able to offer nearly 200 slot machines.
Aquis also submitted a redevelopment plan to the government to increase that number of slot machines. The company agreed to an expensive ($330M) and extensive redevelopment of the property in exchange for at least 200 pokies…and hopefully up to 500 of them.
Just Kidding
The part about the slot machines didn’t actually come to fruition. The casino wasn’t allowed to operate poker machines (pokies). Ultimately, the ACT government rejected the entirety of the redevelopment plan. There would be no pokies or extra land for the planned expansion.
Aquis operated Casino Canberra with some success. It created a gambling environment with 39 gaming tables, a poker room, and a TAB-affiliated sports betting lounge. Management built relationships with people in the community to draw a steady stream of regular customers.
However, the Aquis Entertainment financial reports showed that some success wasn’t enough. In fact, Casino Canberra fairly regularly showed a loss. For example, in the first six months of 2019, the casino lost more than $2.5M. That was a loss increase of more than 18% from the same period in 2018.
A Whale of a Partner
Enter Blue Whale Entertainment. The major Australian hotel operator announced in January 2019 that it would buy the property for $32M, quite a sum greater than the $6.5M that Aquis paid for it several years earlier.
Blue Whale owner Michael Gu believed that his experience in the hotel industry would benefit Canberra Casino by creating a hotel and entertainment hub. It helped that Blue Whale was associated with an investment fund that owned the Crowne Plaza Hotel, adjacent to the casino.
The deal was all but done, though Blue Whale’s plans depended on the ACT government’s approval of renovation plans.
Losing the Whale
In what turned out to be a series of disappointments for Aquis and Fung, the Blue Whale deal fell through.
For more than a year, Aquis operated under the assumption that Blue Whale would take the property off its hands. Aquis’ shareholders had approved the deal, but it was the ACT Gambling and Racing Commission approval that remained pending for more than a year.
In late 2019, the ACT government and regulator denied the deal. The ACT government said that Aquis and Blue Whale failed to provide requested information. The ongoing tension between Aquis and the ACT government heated up. And an ACT spokesperson failed to take any responsibility for the lack of approval for the sale. “The proposed agreement and the subsequent decision not to proceed by the parties were commercial decisions, independent of the government and the Commission.”
Aquis tried to negotiate an extension, but Blue Whale wanted nothing more to do with it. It did, however, want the $280K fee for the broken contract.
Back to Square One
Aquis Entertainment was alone with Canberra Casino again.
Fung did what his business instincts instructed. He renewed his proposal to turn Casino Canberra into a tourism hub via a big redevelopment project. He reentered negotiations with the ACT government to add slot machines to the property.
At the same time, all of Australia was dealing with the Covid-19 pandemic. Aquis was trying to figure out how to safely reopen the property at all.
All the while, it appeared that Aquis was hoping that another buyer would come in and scoop up it up. There were rumors of potential interest in mid-2021, but nothing materialized.
Hope Springs Eternal
On 12 May 2022, Aquis Entertainment announced that it signed a share purchase agreement with the Oscars Group. Oscars wanted to buy 100% of the shares of Aquis Canberra for $52M.
The deal will be a debt-free and cash-free one, with the exception that Aquis will put up $3M of good faith as the deal faces regulatory approvals. Other than that, Oscars said that it already has the finances in place.
Oscars Director Mario Gravanis expressed excitement about acquiring Casino Canberra. “We will be working closely with Aquis over the coming months to satisfy the necessary conditions precedent with minimal disruption to the business and look forward to working with the Casino Canberra team in the future.”
All employees will continue employment under the new ownership. Allison Gallaugher will resign from the Board of Directors but continue on as Casino Canberra CEO and Director. Russell Shields and Mark Purtill will continue to serve on the Board.
Approvals Now and Later
The Independent Directors of Aquis unanimously recommended that the shareholders vote for the deal. CEO Gallaugher said that the transaction provides “considerable value to the company and its shareholders.” She continued, “It recognizes the attractive operating performance of the business which has continued to trade well since reopening post the Covid-19 lockdowns. As an employee of Casino Canberra, I am also very excited about the future and working with Oscars on the continual improvement of our business.”
There will be a shareholder meeting in late July or August of this year. An official date is not yet available. Aquis is working to secure that date, which will follow the sale recommendation report. If Aquis and Oscars obtain shareholder approval ,they will then pursue regulatory and governmental approvals.
All parties hope to complete the entire deal by the end of the third quarter this year.