Star’s winning ways with Labor
In the end, gambling giant Star Entertainment couldn’t have been dealt a better hand.
In the end, gambling giant Star Entertainment couldn’t have been dealt a better hand.
After decades of running the only game in town, Las Vegas sharks Caesars Palace and Hard Rock were circling, putting down serious bids for the Palaszczuk government to issue them a casino licence to take on Star’s faded operation on the Gold Coast.
But desperate to kill off the prospect of competition, Star waged a ruthless and, in some parts, questionable campaign of lobbying, paying for fundraisers, secretly hiring Labor-connected “consultants” and showering freebies on MPs all the way up to Annastacia Palaszczuk, to get what it wanted. The Premier was even wined and dined at the home of Star’s in-house lobbyist Alison Smith, married to former Labor deputy premier Paul Lucas, at the height of the negotiations.
It had warded off competition in Brisbane in 2015 by winning over the newly elected Labor government with a proposal for a $3.6bn Queen’s Wharf flagship casino, now nearing the end of construction.
As part of its Gold Coast strategy, the listed company offered to deliver on a mooted $2bn “masterplan” upgrade of its casino in the tourist town. It vowed it would spend $100m expanding the state-owned Gold Coast Convention Centre, if its monopoly was guaranteed.
Star’s campaign worked. In 2020, in the grip of the pandemic, it was announced the government was abandoning the idea of a second casino.
Two years later, there is no sign of the $100m investment in the convention centre that taxpayers were promised in return. Gold Coast Mayor Tom Tate said on Friday that “Gold Coasters would have every right to feel ripped off today”.
The open door
This week, Ms Palaszczuk finally relented to pressure and ordered an independent inquiry into Star’s fitness to hold casino licences in Queensland, after revelations of allegations of money laundering, fraud, connections to organised crime, and illegal gaming at Star’s Sydney operations.
The Premier’s announcement followed a report in The Australian that Star had secretly hired Labor lobbyist Evan Moorhead – who worked in Ms Palaszczuk’s office as her director of strategy until May 2019 – as a consultant shortly after he went into the private sector.
It can also be revealed that there was infighting within cabinet and the upper echelons of the public service over Star ahead of the sweetheart deal it ultimately secured on the Gold Coast.
At one stage, the perceived easy access for Ms Smith – usually accompanied by Star boss Geoff Hogg – to government offices prompted then tourism minister Kate Jones to warn colleagues and bureaucrats about requirements to have probity officials present at any meeting.
“It seemed to be an open door policy,” one government source said of the pair’s access to senior mandarins and ministers.
Ms Jones had been put in charge of overseeing the second casino tender process, which had been paused ahead of the November 2017 election because of protests about the proposed site on The Spit, on the northern part of the Gold Coast.
Sources says Star was suspected of helping the community campaign which successfully urged the government to axe the then favoured Chinese-backed consortia, ASF, with its plans for a $3bn casino resort.
Ahead of the election, Star hosted and covered the costs of a fundraiser for Yvette D’Ath, who as then attorney-general regulated the state’s gambling industry. The $125-a-head soiree filled a private function room in its Treasury casino in Brisbane and involved Mr Lucas as a guest speaker.
At the time, Mr Moorhead was Labor state secretary. The ALP office has repeatedly refused to say how many other fundraisers were held by Star.
After the Palaszczuk government’s 2017 election win, the gaming company continued to shower ministers with gifts, hospitality and sporting tickets. It was a sponsor of the 2018 Gold Coast Commonwealth Games, and gave top-shelf tickets to gold medal events and accommodation in its hotels to ministers.
Public disclosure records show Ms Palaszczuk also later received upgraded accommodation for the Logies, hosted by Star on the Gold Coast in July 2018, and for the opening of its Darling Hotel.
In an 18-month period, Star’s generosity had been enjoyed by half the cabinet. In March 2019, Ms Jones fulfilled an election promise to “test the market” and resurrect the second casino proposal. She called for registrations of interests for a casino resort, billed as a “global tourism hub”.
Minister blindsided
Star was furious, telling the stock market its “declared position” was that “the Gold Coast is already saturated as an electronic gaming machine market”.
Two months later, then-Star Entertainment chair John O’Neill hosted a dinner for Ms Palaszczuk and International Olympic Committee president Thomas Bach at Star Gold Coast’s Nineteen restaurant that he would later claim set the ball rolling for Brisbane to secure the 2032 Olympic Games.
At the end of the night, Mr Bach invited Ms Palaszczuk to Olympic headquarters in Lausanne in Switzerland to continue their discussions, with Mr O’Neill one of the only non-government or Games representatives on the trip. Brisbane was awarded the 2032 Games last year.
In October 2019, Mr O’Neill told Star Entertainment’s AGM on the Gold Coast that the government should not entertain the idea of a second casino. He said Star would “contractualize” the existing masterplan for a $2bn revamp of the Gold Coast operations, and spend $100m to upgrade the neighbouring Gold Coast Convention Centre, which it managed. But he warned the investment was dependent on “certainty around maintaining the Gold Coast as a one-casino city”.
Ms Jones, who retired at the 2020 election and has declined to answer questions, was intent on squeezing Star for a benefit to taxpayers, with the threat of a second casino as leverage.
But multiple sources said she was blindsided by her cabinet colleague, Ms D’Ath, when she unilaterally acceded to Star’s demands for amendments to the masterplan and lifted a cap on the number of table games at its Gold Coast casino. Ms D’Ath had already given development approval to the masterplan in November 2018 knowing that Ms Jones was about to take the second casino to the market.
According to Right to Information documents, on May 28, 2019 – two months after Ms Jones officially called for registrations of interest for the second casino – Star applied to Ms D’Ath’s department to amend its masterplan. But instead of taking it to cabinet and using it as part of the second casino negotiations, Ms D’Ath approved it less than a month after Star asked, and wrote to Star’s Mr Hogg informing him of her decision in July. Star was also pressing Ms D’Ath to allow its Gold Coast casino to have unlimited gaming tables, to capitalise on growing demand and peak times such as Chinese New Year.
Losing hand
In September 2019, documents show Ms D’Ath’s department recommended she lift the caps on gaming tables for all four casinos in Queensland. She chose to lift the cap just for Star on the Gold Coast. Two senior government sources said Ms D’Ath’s acquiescence to Star’s demands cruelled the government’s hopes of demanding public infrastructure for the taxpayer.
“Star had extracted all this money from the community on the Gold Coast and they haven’t given back,” a source close to the negotiations said. “We wanted to get something out of them. D’Ath totally undermined us.”
A spokesman for Ms D’Ath said she would not comment on cabinet processes as it “was not appropriate”. “I followed the department’s advice at all times on granting any Star requests. The fundraiser hosted by Star has been investigated and there were no adverse findings made.”
The tide turns
Around that time, it is believed Mr Moorhead began working for Star as a consultant, giving advice on how to deal with the government. His factional ally, Labor powerbroker and United Workers Union leader Gary Bullock, had originally backed the idea of a second casino, thinking it could result in new members.
One of the bidders, Caesars Palace, had boasted of its strong relationship with the teamsters union in Las Vegas, with the information passed on to Mr Bullock. He had signed an enterprise agreement in 2018 with Star for its Gold Coast casino workers. But it was later the next year that, according to sources, Mr Bullock – who is the head of the dominant Left faction of Queensland Labor – began to make it known he had changed his mind on a second casino. Ms Palaszczuk also seemed to cool on the idea. “It was then that the mood towards a second casino seemed to change,’’ a government source said.
In late 2019, the government suspended the global tourism hub process, giving Star the right to fast-track negotiations and effectively killing off a second casino. But it wasn’t officially dead until July 2020, after the pandemic had devastated tourism.
Ms Jones said she had “worked really hard to extract value from The Star, but the deal on the table did not stack up for taxpayers”. She said the government had no intention of reviving the market process for a second casino on the Gold Coast.
A spokesman for Ms Palaszczuk said the Premier followed probity rules “at all times”. “Matters subject to probity requirements were not raised. Casinos operate in a heavily regulated environment and no one has received preferential treatment.”
Star’s spokesman said the $100m upgrade of the convention centre was offered in 2019 in return for “certainty around maintaining the Gold Coast as a one-casino city”. “However, government and the Star were not able to reach consensus around the terms for long-term casino licence exclusivity and negotiations ended by mutual agreement in July 2020.” Former Star in-house lobbyist Ms Smith, who now heads the Local Government Association of Queensland, declined to comment, saying it was a matter for Star.
The Weekend Australian is not suggesting any of the individuals named were unduly influenced, but that the closeness of the relationship with Star created an inappropriate perception.
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