Red flags raised over Brisbane Queen’s Wharf casino bid

Concerns with alleged triad connections were raised during the probity process for the awarding of the $3.6bn Queen’s Wharf ­casino contract in Brisbane.

Chow Tai Fook chairman Henry Cheng.

Red flags were raised during the probity process for the awarding of the $3.6bn Queen’s Wharf ­casino contract in Brisbane, with government officials concerned about Star’s Hong Kong partner Chow Tai Fook’s links with Macau gambling boss Stanley Ho and his alleged triad connections.

An investigation by The Weekend Australian into the deal can reveal Chow Tai Fook voluntarily removed people from its bid amid concerns of the Queensland gaming regulator that they would be unlikely to pass the Casino Control Act’s “fit and proper” test.

The late Ho, who was described as the “godfather of gambling” in Macau, had already been banned from involvement in NSW casino operations.

Queensland regulators ended up recommending Premier Annastacia Palaszczuk’s cabinet in 2015 give the lucrative licence to Star – even with Chow Tai Fook chairman Henry Cheng’s 10 per cent stake and directorship of Ho’s Macau casino business SJM Holdings – because rival James Packer’s bid appeared to have bigger probity problems.

The Weekend Australian can reveal deal-makers in the Queensland government – both under Campbell Newman and then Ms Palaszczuk – kept Mr Packer in the game to leverage a better deal from Star, but they knew all along that Mr Packer’s partner – the Chinese government-owned Greenland – would not pass the probity test because the company was “reluctant to co-operate” with the vetting process.

“Crown were never going to pass muster because their partner was effectively the Chinese Communist Party,” said a senior source close to the transaction.

“We knew halfway through we would never be able to transact with James Packer, but we had to give that impression to Star/Echo. They were always going to win.”

The source said Queensland’s casino regulators – embedded in the Office of Liquor and Gaming (OLGR) – found people associated with Chow Tai Fook had “uncomfortable linkages”.

But the source said even if their CVs were removed from the bid, they were still likely to be “sitting in the office in Hong Kong”.

Revelations about the behind-the-scenes machinations of the Queen’s Wharf deal come as the independent inquiry into the Star’s existing Gold Coast and Brisbane casinos prepares to hold public hearings next week.

Ms Palaszczuk commissioned the inquiry after allegations of money laundering and organised crime links emerged from the NSW hearings into Star’s Sydney casino. It was ordered a day after The Weekend Australian reported the cosy links between the Labor government and Star.

The reports exposed how now-blacklisted Labor lobbyist Evan Moorhead had been secretly working for Star after he quit as Ms Palaszczuk’s head of government strategy.

It also uncovered that Star avoided paying for a $100m upgrade for the state-owned Gold Coast Convention Centre, which it previously promised in exchange for the government abandoning plans to issue a second, rival, casino licence on the Glitter Strip.

In an interview on Friday, former Liberal National Party premier Campbell Newman, who initiated the tender process for the Queen’s Wharf casino-resort development on Brisbane’s inner-city riverfront, said it was now clear the regulation of ­casinos in Australia was not good enough.

Mr Newman said he was never told of the regulator’s concerns about Chow Tai Fook but he believed in hindsight that the probity team “didn’t do a good enough job”. “With what we now know about what was going on Crown interstate, and with Star, by definition the process was tainted and that is extremely disappointing,” he said.

“The prima-facie evidence available to the community now would say the job wasn’t good enough and both the short-listing (of Crown and Star) by the Newman government and the final decision by the Palaszczuk government were impacted by this.

“This inquiry better get some answers.”

Mr Newman said he believed the inquiry needed to be widened to probe the government’s interactions with Star and lobbyists.

“The inquiry either should decide itself to go and look at these matters or should seek an expansion of the terms of reference. ­Either way, it all has to be looked at,” he said.

A spokeswoman for the OLGR said the probity investigation analysed the link between Dr Cheng and Ho’s SJM Holdings.

“While the details of the ­suitability investigation are con­fidential, in general terms the weight given to the impact of an association takes into account the nature of the association and the degree of influence or control that association would have on an ­applicant,” she said.

“Subsequent to the initial investigation, the OLGR has continued to proactively monitor Chow Tai Fook and its associates to ensure, amongst other things, any changes to control or influence in Chow Tai Fook were disclosed and to ensure any new associates would be subject to suitability review.

“It is noted that Stanley Ho was in ill health since 2009, ­resigned from SJM Holdings ­limited in 2018 and passed away in 2020.”

The Star (then called Echo Entertainment) joint venture Destination Brisbane had been the frontrunner because it held the existing casino licence for its Treasury operation, meaning there wouldn’t be two rival casinos in the Queensland capital.

Chow Tai Fook and fellow Hong Kong-based Star partner Far East Consortium put the lion’s share of the $800m in equity on the table to prove to the Queensland government the Star bid was financially viable, with the rest to be raised from debt refinancing. In late 2014, influential union boss Gary Bullock – now the powerbroker of the Palas­zczuk government – publicly backed the rival Packer Crown bid for Queen’s Wharf because of his concerns about Chow Tai Fook’s links with Ho.

Mr Bullock released a report called “Junkets and Jewels: Is the Queensland government opening the door to organised crime?” but was eventually won over by Star when the company allowed his union unprecedented access to their staff.

A senior Star source said: “It was an open secret that Star did a deal with the union. They had ­really low union representation on site and we gave them access to dealers and food and beverage workers, and the union could walk straight into the employee dining room.”

Mr Newman had personally encouraged Mr Packer to put in a bid during a meeting in 2014, because the then-premier wanted to ratchet up the competitive tension with Star, which he felt were not running their Gold Coast and Brisbane operations well.

A former senior Star employee with knowledge of its “business case” for Queen’s Wharf said the riverfront casino’s success was predicated on taking 10 per cent of the junket market coming to Australia.

After winning the bid, Star told the stock exchange that it would rely on overseas high-rollers, noting that its Hong Kong-based partners would “generate referral fees for VIP business directly referred” to Queen’s Wharf.

In December 2014, then-Echo boss Matt Bekier insisted the company was “not in business with Stanley Ho”.

“We are the lead partner of this consortium, where we put in 50 per cent of the capital. A 25 per cent partner is Chow Tai Fook. Chow Tai Fook is one of the great diverse wealthy business families of Asia. They have many business relationships with multiple entities, including Stanley Ho, as we understand it.

“The probity process will work through these relationships and we’ll work out whether there are any issues to this or not.”

Mr Bekier said at the time that he expected Queensland probity officials would work through the issues, like the NSW process had done with Mr Packer, whose Macau casino partner was Ho’s son.

Star and Mr Bullock declined to comment given the ongoing probe into the casino operations.