A proposed deal between gambling giant Star Entertainment and its partners for Brisbane’s Queen’s Wharf casino complex has sparked concerns among employees about their job security. The agreement, which involves Star relinquishing its 50 percent stake in the $3.6 billion casino project, still faces significant regulatory hurdles and requires approval from the Queensland government.
Star Entertainment announced to investors on Tuesday that it had reached an agreement with its Hong Kong partners, including Chow Tai Fook Enterprises (CTFE) and Far East Consortium. The deal would see Star divest assets such as its stake in the Queen’s Wharf casino, as well as the Treasury car park and hotel, in exchange for a $53 million cash injection and stakes in Gold Coast hotels near its casino there. However, the deal’s completion hinges on passing regulatory checks.
Financial Struggles and Strategic Retreat
Star’s decision to offload its stake in the Queen’s Wharf precinct comes after a period of financial turbulence. The company has been grappling with the impacts of regulatory inquiries and stringent gaming regulations. Initially slated to open in 2022, the Queen’s Wharf project faced delays due to lockdowns, flooding, and a mould outbreak, pushing its opening to August 2024.
In March, as part of efforts to avoid insolvency, Star agreed to sell its 50 percent stake to its joint venture partners. This move marked the start of a tumultuous five months, during which the partners initially announced plans to terminate the agreement, only to later reverse their decision and finalize a new deal.
Regulatory Approval: A Critical Hurdle
According to a Queensland government spokesperson, the agreement between Star and its partners is not yet finalized.
“The agreement … is subject to regulatory approvals, which will be considered following the receipt of formal submissions,”
the spokesperson stated. The government emphasized that employee welfare and job security remain top priorities.
Griffith University Business School’s Graeme Hughes commented on the potential impact of the deal, noting that it could provide a much-needed relief for Star Entertainment.
“For Star, the Queen’s Wharf sale is a strategic retreat from what has become a financial quagmire, with development costs blowing out by more than $1 billion,”
he said.
“The deal takes a huge debt pile off its books and signals a clear shift in focus.”
However, Hughes cautioned that the success of the deal, and by extension Star’s financial lifeline, depends on regulatory approval.
“At the core of the issue is the transfer of a major casino licence to a new ownership structure,”
he explained.
“Regulators will scrutinize Chow Tai Fook and Far East to ensure they meet the stringent probity requirements necessary to control such a significant asset. The stakes are high.”
Employee Concerns and Union Support
The uncertainty surrounding the deal has left employees at the Queen’s Wharf precinct anxious about their future. United Workers Union casinos director Andrew Jones expressed the union’s support for Star Brisbane during its challenges, but acknowledged the increased uncertainty brought by the latest developments.
“The latest news once again increases uncertainty for members. We’re seeking further information from the company about this announcement,”
he said.
Jones emphasized the union’s stance that any future structure of Star Brisbane should prioritize job security for workers, which in turn would provide stability for the casino and the families of its employees. Meanwhile, Star continues to seek financial stability, with its cash reserves dwindling to $79 million by the end of 2024.
The outcome of the regulatory review and the subsequent approval or rejection of the deal will be pivotal in determining the future of the Queen’s Wharf casino, the welfare of its employees, and the strategic direction of Star Entertainment.
