One of Australia’s biggest casino operators is in trouble. Will Queensland come to Star’s rescue?
Amid allegations, reviews and findings it shouldn’t hold a casino licence in New South Wales, there are questions about Star Entertainment Group’s future – including from a premier considering tax breaks to help it continue to operate in Queensland.
Just days after one of its greatest triumphs, the partial opening of a huge new casino and precinct in the heart of Brisbane, Star has fallen into apparent turmoil, with its shares temporarily suspended from trading on the ASX this week after the company failed to lodge its financial results on time. The Queensland government is now considering relief to help it keep its doors open.
So what is happening with the gambling and entertainment behemoth?
Where does Star Entertainment operate?
The Star Entertainment Group, worth $1.29bn, is one of the largest casino companies operating in Australia.
It owns and operates casinos in Sydney, the Gold Coast and Brisbane, including The Star casino on Sydney’s Darling Harbour, The Star Gold Coast and the Gold Coast Convention and Exhibition Centre.
It also operated Brisbane’s Treasury casino until it closed last month.
Just last week, the company started opening a brand-new $3.6bn project in Brisbane’s CBD. In addition to the new Star Brisbane casino, the 12-hectare Queen’s Wharf precinct will feature three hotels, apartments, restaurants, an event centre, and its own footbridge.
What did a NSW review find about its operations?
Star has fallen afoul of gambling regulators in recent years.
A NSW Independent Casino Commission (Nicc) inquiry led by Adam Bell SC heard evidence of money laundering, links to organised crime and fraud. Star was heavily criticised for the involvement of “junket” operators – organised international tours of high-roller gamblers often used to launder money for organised crime.
The inquiry also found the company had misled regulators.
Related: Star declared unsuitable to regain Sydney casino licence as NSW regulator mulls future
In 2022, The Bell Review found Star had engaged in an “inherently deceptive and unethical” process, had improperly responded to the risk of money laundering and was unfit to hold a casino licence, among other failings.
The NSW regulator suspended the company’s licence indefinitely, fined the company $100m and appointed a manager.
NSW has extended the company’s special manager until 2025, for the fourth time.
Last month, the Nicc released a second report by Adam Bell, that found Star was still “falling short”, had made four compliance breaches and was still not suitable to hold a casino licence in NSW.
The regulator said it was considering next steps for the future of the suspended casino operator and criticised it for not addressing “governance and cultural concerns raised in the first Bell Report”.
Why hasn’t the Queensland government followed suit?
In 2022, a Queensland inquiry led by former Court of Appeal judge Robert Gotterson found that Star was “unsuitable to hold a licence” in that state and criticised a one-eyed focus on profit and money. Star were also found to have actively encouraged gamblers banned in NSW and Victoria to bet at its Queensland casinos.
Queensland fined the company $100m, but the state government did not suspend or cancel the company’s casino licence, deferring a threatened 90-day suspension as part of a strategy to get the company to clean up its act.
The company continued to jointly develop its new Queens’ Wharf casino in Brisbane, with joint venture partners Chow Tai Fook Enterprises and Far East Consortium.
The state government approved Chow Tai Fook Enterprises as a casino operator in May.
But the company took to court to suppress the publication of the probity report the government used to make the decision.
What is the Queensland government proposing to do instead?
The ASX suspended Star from trading last week, after the company failed to lodge its results before the 31 August deadline.
The company is now seeking financial support from both NSW and Queensland, and from additional investors. It was backed by the United Workers’ Union, which represents casino employees.
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NSW has flatly turned Star down. Its premier, Chris Minns, determined that NSW taxpayer money would primarily support the company’s Queensland expansion.
The Queensland government has proven more amenable. Steven Miles confirmed the state is negotiating a delay to a $300m tax bill owed by the company.
Miles said his “first priority” is to protect the 1400 jobs the new casino represents.
“It might not work, and those 1400 Queenslanders would lose those jobs, but I think it’s appropriate for the government to look to what we can do to try to protect those jobs,” he said on Thursday.
Miles confirmed that negotiations have been under way for “a couple of weeks” regarding government support.
What does this all mean for the company and its future?
On Thursday, the company’s board of directors told the ASX it is reviewing its financial and liquidity position, in order to finalise its preliminary financial report for the year. It would resume trading upon release of the report. It doesn’t yet have a timeline to do so.
The company is “holding discussions with various stakeholders in relation to its liquidity position in light of adverse trading and other conditions” it said in the statement.
It confirmed it was considering using safe harbour provisions to attempt a company restructure.
