Are Aussie casinos losing ground to regulations, online boom?

February 15, 2025

Are Aussie casinos losing ground to regulations, online boom?

Australia’s land-based casino industry experienced rapid expansion throughout the 20th century, becoming a cornerstone of the nation’s entertainment and tourism sectors. The opening of Wrest Point Hotel Casino in Tasmania in 1973 marked the country’s first legal casino, setting the stage for a national boom in the industry.

Over the following decades, casinos flourished across multiple states, offering not only gambling but also luxury dining, entertainment, and accommodation. This growth was further fuelled by the legalisation of various gambling formats, reflecting a societal shift towards wider acceptance. However, the industry’s trajectory changed drastically with the onset of the COVID-19 pandemic in 2020.

Government-imposed lockdowns and strict social distancing measures forced casinos to close for extended periods, causing a sharp decline in revenues. While operations have resumed, the sector has struggled to regain its footing, with many operators now facing mounting financial difficulties.

One of the most significant casualties is Star Entertainment, a leading Australian casino operator. The company is currently grappling with severe financial instability, with reports indicating it may enter administration within a week due to liquidity concerns. In an effort to stay afloat, Star has been selling off assets, including a 50 percent stake in its Destination Brisbane Joint Venture. However, it has yet to secure a sustainable financial solution and is seeking investment from firms such as Blackstone to stabilise its operations.

The troubles extend beyond Star Entertainment. Crown Resorts, another major player, is also facing financial uncertainty. The company reported a narrowed loss of AU$164.8 million (€100 million) in the fiscal year ending 30 June 2024, improving from the AU$199 million (€121 million) loss recorded the previous year. However, this reduction is largely attributed to cost-cutting rather than increased revenue. Furthermore, company is facing regulatory heat over money junket conduct.

However, the challenges facing the land-based casino industry go beyond just these two major operators. Broader data suggests a decline in the popularity of traditional gambling venues in Australia, exacerbated by multiple issues.

Australian casinos slump amid challenges

The Australian Institute of Health and Welfare reported that total gambling expenditure in Australia fell from AU$25.9 billion (€15.7 billion) in 2018–19 to AU$21.2 billion (€12.8 billion) in 2019–20. This decline was driven largely by significant reductions in land-based gambling activities, including a 29 percent drop in casino gambling and a 21 percent decline in poker machine revenue from pubs and clubs. The trend is likely to continue even in 2023 & 2024.

A study by the Australian Gambling Research Centre found that post the pandemic, the frequency of gambling on electronic gaming machines (pokies) dropped significantly due to the closure of physical venues.

The COVID-19 pandemic dealt a severe blow to Australia’s land-based casino sector, but deeper structural issues have contributed to its ongoing decline.

One major concern is the increasingly stringent regulatory environment. In recent years, Australia’s gambling industry has faced heightened scrutiny, with authorities imposing tighter compliance measures. While there is no direct evidence that these regulations have caused casino closures, industry stakeholders argue that they have added significant operational challenges.

Regulations & industry challenges

Australia’s gambling industry faces heightened scrutiny, with tighter compliance measures adding significant operational challenges. In 2022, major casino operators, particularly Crown Resorts and Star Entertainment, came under intense investigation.

Authorities found Star Entertainment had allowed high-risk patrons linked to criminal activities to gamble at its venues. Regulatory inquiries in New South Wales and Queensland deemed it unsuitable to hold a casino licence, resulting in heavy fines, leadership resignations, and operational restrictions.

Crown Resorts also faced widespread anti-money laundering breaches. Investigations in New South Wales, Victoria, and Western Australia led to record fines and forced management overhauls, compliance reforms, and asset sales. The increased oversight indeed sparked concerns over financial sustainability.

Furthermore, Victoria’s Casino Control Regulations 2023 introduced additional measures to combat illicit activities, but these new rules also brought higher operational costs. The Regulatory Impact Statement acknowledged that while these regulations strengthen consumer protections, they also increase the financial burden on casino operators.

Industry experts warn that excessive regulation could push gamblers towards offshore or illegal markets, which operate without consumer safeguards. Reports suggest that offshore gambling already accounts for 25 percent of Australia’s market. If further restrictions are imposed, Australia risks losing billions in tax revenue while leaving players vulnerable to unregulated platforms.

The rapid rise of online gambling is another key factor contributing to the decline of Australia’s land-based casinos. Digital betting platforms, including sports wagering, e-sports, lotteries, and online casino games, have seen significant growth, drawing players away from traditional venues.

A decade-long study by the Victorian Responsible Gambling Foundation revealed a steady decline in traditional gambling participation, while online gambling surged. Participation in online gambling rose from 4.8 percent to 19 percent, highlighting a major shift in consumer behaviour. As digital options become more accessible and convenient, the sustainability of brick-and-mortar casinos is increasingly in question.

Positive trends in Aussie iGaming

The wider gambling industry is now preparing for further disruption, with doubts growing over the long-term viability of land-based casinos. As per statista, the global gambling market remains strong. Revenue is expected to reach $477.30 billion (€441.70 billion) in 2025, with an annual growth rate of 3.28 percent projected between 2025 and 2029. By 2029, the market volume is forecast to hit $543.10 billion (€502.90 billion).

The casino and casino games sector alone is set to generate $245.40 billion (€227.20 billion) in 2025, with the United States leading revenue generation at $121.30 billion (€112.30 billion). User penetration in the gambling market is projected to be 12.3 percent in 2025, reaching one billion users by 2029.

Despite this growth, Australia’s land-based casinos continue to struggle. Authorities must reassess regulations and market dynamics to prevent further closures and ensure the sector’s survival in an increasingly digital gambling landscape.