Des Houghton: Premier should step in and help keep Star in business
It might sound preposterous coming from someone rigidly opposed to government assistance for private firms, but the Premier should make an exception to save Star, despite the political risks, writes Des Houghton. HAVE YOUR SAY
Opinion
Don't miss out on the headlines from Opinion. Followed categories will be added to My News.
There is a very strong case for the state government to throw Star casino a financial lifeline to stop it going into receivership.
That may sound preposterous coming from someone rigidly opposed to government assistance for private firms. But Star may be a worthy exception.
I am not suggesting the casino operator, or its Hong Kong partners Chow Tai Fook Enterprises and Far East Consortium, should be given cash.
Nor am I suggesting the gaming taxes should be waived.
Rather, the taxes and licensing fees could be deferred to save Star from going down, with a domino effect hitting jobs, tourism and the hotel and airline industries.
Those inside the tent say the government has been asked for an 18-month deferral.
The state has agreed to deferrals before. Mining royalties are sometimes deferred for five years to allow firms to absorb their substantial start-up costs before they ramp up production.
There is another compelling reason for the Crisafulli government to cut a deal. Queensland taxpayers may lose perhaps hundreds of millions if it doesn’t. Why?
The Star Entertainment Group paid the states $412m in gaming taxes and levies in 2024, and more than that the year before.
These rivers of gold would dry up if Star was placed in voluntary administration before a new operator can be found.
The Queensland Revenue Office rejected my questions for more clarity on Queensland’s share of those gaming revenues.
“Confidentiality and privacy legislation provisions do not permit us to comment on individual taxpayer matters,” I was told.
We taxpayers have skin in the game.
Rachel Vagg, the state Auditor-General, rang alarm bells in her report to parliament this week when she said, “One of the consortium partners is experiencing a deteriorating financial position.”
Vagg said the Department of Housing and Public Works still owned most of the land and some buildings within the Queen’s Wharf precinct she valued at $539.4m.
Sarah Amos, the acting Director-General for Housing and Public works, said in a letter tabled in the House that the government was closely monitoring the negotiations.
There is speculation at the big end of town that Clive Palmer and Gina Rinehart may deal themselves in.
Hello, Clive and Mrs Rinehart. Your country needs you. You are gamblers at heart. Roll the dice.
Hotel richlisters Bruce Mathieson Sr and his son Bruce are already shareholders in Star and are known to be interested in acquiring Star Gold Coast in a side deal.
And it is likely they will get it, I was told.
If the Star sinks, the state would also lose sizeable payroll tax moneys.
Competing parties have proposed up to seven different “scenarios” to save Star, some involving complex asset swaps.
The “marriage of convenience” between Star as operator and its Hong Kong partners was said to me to be “extremely strained”. Expect a divorce by Christmas.
Chow Tai Fook Enterprises and Far East Consortium do not have the right to run the casino, and do not want to.
They want an international operator to join them.
In the long term that may be someone with a bigger asset base than Bally, which may not have the balance sheet to support Star and win the blessing of the banks.
The Hong Kong partners want an operator from the US or Macau who can bring with them a large loyalty program membership list to boost numbers.
I’m told Delaware North is in the mix. It operates the Darwin casino – and 18 others – and is one of the largest privately owned hospitality companies in the world with airports and resorts in its portfolio.
The government has already said it will not be offering cash injections and will not pay the wages of the 3000 staff. Nor should it.
Chow Tai Fook and Far East also want the casino doors to remain open so they can bump up tourist numbers by changing the business model to get more revenue from entertainment, food and beverage and retail.
This model helped Las Vegas prosper and become a global tourist destination.
Up to 90 per cent of Star’s revenue comes from gaming, most from poker machines.
Casino operators in Las Vegas realised four decades ago that a business model relying too heavily on gaming was doomed.
They went from having an 80 per cent gaming model with 20 per cent entertainment to a 70-30 split between gaming and entertainment.
And they are not stopping there. Casino operators say they want to increase the entertainment revenue stream to 80 per cent.
That is why they pay extraordinary sums to have performers like Taylor Swift and Elvis impersonators said to be better than the original.
Vegas has even resurrected Michael Jackson in a “mesmerising” show, Michael Jackson ONE by Cirque du Soleil.
The show is billed as an “immersive experience” with dance and visual effects from drones to create a virtual reality fantasy that brings the greatest pop star of all back to life. Sort of.
There are social reasons to keep the casino open despite Star Entertainment Group being fined for breaching anti-money laundering laws.
The corporate watchdog’s regulations worked. There will be no such regulation if Star shuts its doors and punters inevitably switch to online gaming.
Ultimately, David Crisafulli’s ministers will have to ask themselves, why did we build Queen’s Wharf and what did we get?
With not a cent of taxpayers’ money, Chow Tai Fook and the Far East Consortium delivered the largest urban renewal project in Australia with a new casino, hotels and residential apartments – and 7.4ha of public space.
Throw in the Neville Bonner Bridge, the Bicentennial Bikeway, Miller Park, as well as Star Brisbane’s Sky Deck viewing platform and its level seven Leisure Deck.
And there is more to come with the upgrade of seven heritage buildings.
That has to be applauded.
Originally published as Des Houghton: Premier should step in and help keep Star in business
Bolt: Gutless and incoherent Coalition should be ashamed
The Coalition fought to a shock lead in the polls, and then … stopped. So here we are, back with a Labor government that’s left Australia poorer, weaker, more divided and deeper in debt.
Kremlin would be proud of Labor campaign
Labor’s campaign about Peter Dutton’s nuclear power plants and fabrications about cuts to Medicare are reminiscent of propaganda practised by communist regimes, writes Des Houghton.