Besieged gaming giant Star Entertainment has agreed to give up both running and part-owning the $3.6 billion Queen’s Wharf casino in Brisbane, cutting a deal to avoid financial calamity.
Star told investors this morning it had finally signed an on-again, off-again deal with its controversial Hong Kong partners, one of which was once linked to organised crime figures.
That deal is still subject to clearing hurdles, including regulatory checks.
But, if successful, ASX-listed Star would take stakes in Gold Coast hotels near its casino there.
It will also get to pocket $53 million in the deal.
The Star casino is located at Queen’s Wharf in Brisbane. (ABC News: Christopher Gillette)
Replacement operator to come in
Star, in turn, would give up assets, including its 50 per cent stake in the consortium behind Queen’s Wharf, as well as the Treasury car park and hotel.
The move will alleviate a heavy cash flow and debt burden on Star. The consortium had required future equity payments of $212 million and a loan facility of $1.4 billion needed to be refinanced in December this year.
One concern during negotiations had been whether Star would get to retain rights and fees to manage the Queen’s Wharf.
The deal announced on Tuesday specifies that a replacement operator — yet to be named — will come in at some stage.
A replacement operator will come in to manage the casino at some point. (ABC News: Christopher Gillette)
Star could even receive a bonus payment of up to $225 million in 2030, based partly on the performance of the consortium.
The deal depends on regulatory approvals.
A change of ownership would require state approval, but the government has not yet indicated whether that would happen.
Crime links uncovered
The Hong Kong consortium partners are Chow Tai Fook (CTF) Enterprises and Far East Consortium.
In 2022, the ABC established alleged criminal associations involving CTF, which triggered a government inquiry.
Finally released earlier this year, the government report found CTF had falsely and repeatedly claimed to have cut business ties with a criminal syndicate boss.
The hidden ties were with junket boss Alvin Chau through a Vietnam casino venture — Chau is now serving 18 years in prison over a billion dollar fraud by his VIP gambling outfit, or “junket”, Suncity.
The-then Labor government found CTF was still suitable to hold a casino licence, arguing its lack of “candour and fulsomeness” with the regulator was due to “differences in cultural and organisational expectations”.
Attorney-General Deb Frecklington has been contacted for comment. (ABC News: Cameron Lang)
Anti-gaming activists have previously said the state should rule out a takeover due to the crime links.
Attorney-General Deb Frecklington’s office did not comment beyond saying workers were a priority.
Star’s financial performance had been crumbling after being smashed by regulatory inquiries and increasingly tough gaming regulations.
Its shares were trading higher than $4 each in 2019, but those are now wallowing at around 12 cents.
‘ The preceding article may include information circulated by third parties ’
‘ Some details of this article were extracted from the following source www.abc.net.au ’
