We’re not helping Star unless its casino doors stay open, says David Crisafulli

The Queensland government is preparing for the likely collapse of Star Entertainment Group, saying administrators will need to keep its casinos open if they are to get any state assistance.

The Queensland Premier says Queen’s Wharf must stay open. Picture: Steve Pohlner

The Queensland government is already preparing for the likely collapse of troubled Star Entertainment Group, saying administrators will need to keep its casinos open to qualify for any future support.

Premier David Crisafulli on Monday reiterated that no financial assistance would be provided to Star but flagged co-operation with a future owner or operator to ensure the doors are kept open at Queen’s Wharf and Star Gold Coast.

He did not specify what assistance the government could provide but was open to “bids” from any new owners.

“My only focus is on the doors being kept open and people being able to go to work,” said Mr Crisafulli. “I’ve lost no sleep over the company called Star. I think a lot about the workers, though, and my non-negotiable is that they stay in a job. Whoever runs that asset needs to know that our willingness to be good partners and assist is all predicated on one thing, and that is the workers being paid, and the next thing is money that’s owed to Queenslanders needs to be paid.

“It’s a non-negotiable that if that place gets closed any option for future partnerships gets removed off the table.”

Mr Crisafulli added that he was on a “unity ticket” with the union representing casino workers on the issue of job protection.

Star Entertainment employs more than 8000 workers across NSW and Queensland who could be thrown out of their jobs as early as this week.

The NSW government has declined to comment on its plans to support workers if Star collapses but says it is closely monitoring the situation.

Star shares were automatically suspended from trading on the ASX on Monday after the company failed to lodge its half-year financial report by the due date on Friday. It confirmed that its survival depends on it nailing down a rescue plan to refinance its $430m debt mountain.

The company said it was unlikely to be in a position to lodge its interim financial report “unless and until” it has secured a commitment to refinance all of the group’s existing corporate debt as well as an agreement to provide additional liquidity.

Queensland Premier David Crisafulli has issued a blunt warning to the ailing Star Entertainment Group.

“The company will continue to keep the market informed of material developments … there remains material uncertainty as to the group’s ability to continue as a going concern,” it said.

Star owes $430m to a syndicate of lenders and also is on the hook to pay back half the $1.6bn of debt on its new Queen’s Wharf hotel and casino complex development in Brisbane. It also faces a fine of as much as $300m in an action against it by federal money-laundering regulator Austrac.

Macau-based casino sector adviser and former gaming practice director at PricewaterhouseCooper, David Green, said Star “might believe in fairies” if they think that they can suddenly find an injection of capital that is going to save the day.

“I don’t think that is going to happen,” Mr Green said in a recent interview broadcast by Inside Asian Gaming. “I think the people that are already invested in the Star are likely to be effectively quarantined in that position while the company works through a sale, a collapse or a very remote possibility of a workout.” The stockmarket suspension comes amid speculation Star may have left appointing administrators too late, with a fire sale of assets looming as a worst-case scenario.

Peter Cohen, a former chief executive of the Victorian Commission for Gambling Regulation, said investors would prefer an asset break-up to avoid residual issues, including looming fines. Mr Cohen said when Blackstone bought Crown in 2022 for $8.9bn it did not anticipate the $250m of fines from the Victorian regulator that followed.

“So if you buy Star Entertainment Group, you’re buying all the residual problems that are still there,” Mr Cohen said. “The experience of Blackstone should forewarn someone that the issues are not yet fully resolved and you may end up as the owner of that company getting more problems than you thought.”

On the other hand, a reasonably big international operator might want to get a footprint in Australia and Star might not be a “bad starting point”.

“But you’ve got to go in with your eyes open, knowing full well that you might have a number of unanticipated costs that flow through,” he said.

Star has continued to spend hundreds of thousands of dollars on community partnerships in Queensland in a sign it remains committed to building its brand.

That includes the Brisbane Portrait Prize, Brisbane Festival, the Lady Mayoress Ball, Queensland Future Leaders’ Forum, Brisbane Bullets, Museum of Brisbane and Royal Queensland beer and wine awards.

Originally published as We’re not helping Star unless its casino doors stay open, says David Crisafulli