SYDNEY—Hong Kong investors have bolstered their campaign to build a new multibillion-dollar casino in the capital of Australia's Queensland state by tempting rival Echo Entertainment Group Ltd. EGP.AU +2.60% Echo Entertainment Group Ltd. Australia: Sydney ^$3.16 +0.08 +2.60% June 23, 2014 4:10 pm Volume : 9.58M P/E Ratio 41.35 Market Cap $2.54 Billion Dividend Yield 2.53% Rev. per Employee N/A 06/23/14 Hong Kong, Australia Investors... 05/12/14 Corporate Australia's National... More quote details and news » EGP.AU in Your Value Your Change Short position to join them.

Sydney-based Echo, which owns the only existing casino in Queensland's capital, Brisbane, said Monday that it has formed a joint venture with Hong Kong-based companies Chow Tai Fook Enterprises Ltd. and Far East Consortium International Ltd. 0035.HK +0.71% Far East Consortium International Ltd. Hong Kong ^$2.82 +0.02 +0.71% June 23, 2014 4:01 pm Volume : 1.18M P/E Ratio 5.57 Market Cap $5.18 Billion Dividend Yield N/A Rev. per Employee $1,541,970 06/23/14 Hong Kong, Australia Investors... More quote details and news » 0035.HK in Your Value Your Change Short position to bid for the right to develop Brisbane's second casino complex, at Queen's Wharf.

Tropical Queensland, home to the Great Barrier Reef and renowned beaches, is emerging as a new hot spot for Asian casino investment as developers look to tap an expected surge in Chinese visitors Down Under. The state's conservative government is playing a part, too, allowing for the development of more gambling properties to stimulate the economy and offset a slowing resources boom.

The Hong Kong companies and Echo, which also owns The Star casino in Sydney and Jupiters Hotel & Casino on Queensland's Gold Coast, had previously submitted two separate bids. By joining forces, they have made the bidding a three-way race. Crown Resorts Ltd. CWN.AU +0.87% Crown Resorts Ltd. Australia: Sydney ^$15.10 +0.13 +0.87% June 23, 2014 5:35 pm Volume : 1.20M P/E Ratio 18.41 Market Cap $10.90 Billion Dividend Yield 2.38% Rev. per Employee $194,408 More quote details and news » CWN.AU in Your Value Your Change Short position , controlled by Australian billionaire James Packer, and China's Greenland Holdings Group are the other two parties.

Under the deal, Echo would contribute 50% of the development's costs, while Chow Tai Fook and Far East Consortium would each contribute 25%. The Queensland government last month said shortlisted companies must lodge fully developed proposals late this year, with a winner expected to be picked early next year.

Last week, the Queensland government released for public viewing the environmental impact statement for Hong Kong billionaire Tony Fung's proposed 8.15 billion Australian-dollar (US$7.69 billion) Aquis integrated casino and resort complex just outside the Great Barrier Reef town of Cairns. The ambitious development would include 7,500 hotel rooms, gambling facilities, a convention center, theaters, and an artificial lake and golf course. The government has indicated it may also approve construction of a second casino on the Gold Coast.

Tourist arrivals in Australia surged by 10.4% in the 12 months through April, helped by a decline last year in the Australian dollar from historic highs. China ranked only second to New Zealand as the greatest source of visitors.

The sharp rise in tourism comes as China's middle class becomes more affluent and vibrant. Chinese visitors are already spending more in Australia than travelers from any other country.

"The Asian investor has a bigger wallet to deploy here and a broader mindset to build integrated resorts and create destinations," said David Wiadrowski, Sydney-based head of Australian Entertainment and Media at PwC.

"And from a cultural perspective, Chinese travelers do like to gamble," he added, noting that 90% of Chinese travelling to the U.S. visit Las Vegas.

Sensing an opportunity, Chinese investors have begun planning Australian casino developments, buying hotels and even experimenting with more offbeat attractions such as a China-themed amusement park planned for the small beachside town of Wyong in New South Wales state.

Mr. Packer is also behind a proposed casino and six-star resort in Sydney, hoping the establishment of luxurious facilities on the city's picturesque harbor will entice Chinese residents to make the 11-hour flight from Beijing. Resorts in Queensland have a slight geographic advantage, with Brisbane an hour further north of Sydney and Cairns closer still to Asia.

Still, such developments face growing competition. The Philippines last year opened its first casino and Japan has considered relaxing its strict anti-gambling laws. Recent new integrated resort developments in Singapore and existing casinos in Macau will continue vying for Chinese tourists.

"It's going to be an interesting period of time to see if the returns these investors expect are achievable, given the competition that's emerging," Mr. Wiadrowski said.

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