Star Entertainment granted stay of execution for Brisbane, Gold Coast licences

The Queensland government has granted a new reprieve to Star Entertainment’s local operations, while awaiting the outcome of the inquiry in NSW.

As Star Entertainment’s public evisceration continues at the Bell II inquiry in NSW, Queensland is emerging as a warmer regulatory environment for the troubled casino operator.

With the odds shortening the Bell inquiry may determine that Star is unsuitable to hold a casino licence in Sydney, there are signs regulators in Queensland, where the company is about to open its $3.9bn Queen’s Wharf project, may be more forgiving.

The Queensland government on Friday gave Star a seven-month stay of execution on the suspension of its casino licences in the state, despite damaging claims at the Bell II inquiry.

The suspension date in Queensland has been pushed back from May 31 to December 20, allowing the group breathing space as it prepares to open Queen’s Wharf in August.

Star’s Queensland casinos were hit by a raft of disciplinary actions in 2022 including penalties of $100m and the appointment of a special manager. Unlike Star’s Sydney casino, the Queensland properties retain their licences but they are subject to a remediation plan.

The company told the ASX on Friday that the Queensland government had elected to push back suspension while awaiting the outcome of the Bell inquiry.

Attorney-General and Justice Minister Yvette D’Ath said the decision to defer the suspensions would not limit the capacity to take action “should the second Bell Inquiry make serious and adverse findings … or if The Star doesn’t meet its remediation ­obligations”.

Taylor Collison gaming analyst Andrew Orbach said in a note to clients that Star was more important to the Queensland government than to the NSW government.

“That’s partly because the Queen’s Wharf Brisbane complex will be much more significant to the economy of Queensland than Star Sydney is to NSW,” said Mr Orbach.

Queen’s Wharf is a sprawling project that features four new luxury hotels, more than 50 new restaurants and bars, and 1500 apartments. It will dominate the CBD, employ thousands of workers and potentially attract more than 1.4 million visitors each year.

Star received more welcome news last month when Queensland regulators cleared Star’s Hong Kong partner in the Queen’s Wharf project, following an investigation into its links with criminals.

Ms D’Ath said that after a detailed investigation she had decided that Chow Tai Fook Enterprises (CTFE) continued to be a suitable partner for Queen’s Wharf.

Ms D’Ath said while the probe established “CTFE did have dealings with a business associate of ill repute which they did not disclose to the regulator, there was insufficient evidence that CTFE was aware of this person’s background during the period of their association”. The investigation has attracted some criticism given it came less than four months before Queen’s Wharf was due to open its doors in a crucial election year for the Labor government.

“If you wish to view this cynically, you could see the possibility that the Queensland government wanted this particular outcome and engineered an investigation to ensure it got the result it wanted,” Mr Orbach said.

“For example, not naming the individual of concern suggests an interest in downplaying the public announcement of the result of the investigation.”

The Star casino in Sydney. Picture: John Fede

Star arguably faces a tougher regulatory environment in NSW where ultimate power over licences rests with the NSW Independent Casino Commission (NICC). In contrast, decisions about casino licences in Queensland are ultimately decided by the Attorney-General.

Former Star chief executive Robbie Cooke fell on his sword earlier this year after NICC chief commissioner Philip Crawford decided he had lost confidence in his ability to push through a remediation plan.

Adam Bell SC is conducting his second inquiry into Star’s suitability to hold a casino licence in Sydney, following a probe in 2022 that found Star had not met its obligations to prevent money laundering. The Star’s casino licence in Sydney was suspended indefinitely on October 22, 2022. Mr Bell will report later this year to the NICC.

Mr Orbach said different regulators could form different opinions based on the same facts. He pointed to the Nevada Gaming Control Board in 2007 approving US casino giant’s MGM entry into Macau in an arrangement with the Ho family that was not approved by New Jersey. He added New Jersey subsequently did approve the joint venture, arguing “new information” had been ­received.

The Star has been fighting damaging allegations at the Bell II inquiry, including document falsification, claims executives spied on NICC-appointed manager Nicholas Weeks, and the defrauding of the company by criminals accessing faulty cash machines.

Counsel assisting the inquiry, Caspar Conde, outlined evidence that Star was becoming increasingly hostile to Mr Weeks and his efforts to enforce compliance at Star. He referred to a message from Star chairman David Foster to Mr Cooke last year saying that the company’s response to Mr Weeks’ findings on lagging reform efforts could be a “catalyst to get rid” of him and cause “fireworks”. Mr Weeks said that in January this year Mr Cooke and Mr Foster had found out about meetings with his lawyers and regulators scheduled for February by “somehow accessing my diary”.

Mr Foster in a text message to Mr Cooke said the meetings showed Mr Weeks and regulators were “prepping for war and we better do the same”.

Star has been forced to sack staff at its Sydney and Queensland casinos in recent weeks over falsified welfare checks.

Star shares dropped 2.2 per cent to 45c on Friday.

Originally published as Star Entertainment granted stay of execution for Brisbane, Gold Coast licences