Star losses rise with Queen’s Wharf deal on verge of collapse

3 months ago 17

Embattled casino operator Star Entertainment is facing the potential collapse of the deal to offload its troubled Queen’s Wharf precinct in Brisbane to its Asian partners a day before the deadline.

Underlying losses increased for the June quarter at Star, but the bigger problem is the possible eleventh-hour failure of the sale, according to an update to the ASX.

Brisbane’s Star Casino at the riverfront
Queen’s Wharf precinct.

Star’s quarterly report – which precedes audited financial accounts due next month – states that it made a loss before interest, tax, depreciation and amortization costs (EBITDA) of $27 million for the quarter ending June 30 on revenue of $270 million.

The casino operator said mandatory carded play and $5000 cash limits at its flagship Sydney casino have continued to drag on its gambling performance, with average daily revenue down 17 per cent since it was introduced in August last year.

Cash limits are due to drop to $1000 within weeks in Sydney, with its Queensland operations due to follow with similar reforms.

Star also flagged that it is unlikely to finalise a deal to sell its share of Brisbane’s Queen’s Wharf casino to its consortium partners – Hong Kong-based Chow Tai Fook Enterprises and Far East Consortium – by the July 31 deadline.

The parties are renegotiating the deal after the Asian partners threatened to walk away from the March agreement.

“In The Star’s view, based on the current status of discussions, it is unlikely that the parties will be in a position to finalise long form documents by 31 July 2025,” it said.

This could lead to Star having to repay more than $36 million to its consortium partners by September.

Star’s cash levels are much stronger at $234 million after receiving funds from recent asset sales and an equity injection from US group Bally’s and interests associated with major shareholder Bruce Mathieson.

Star is also awaiting the outcome of a court decision on fines for breaches of anti-money laundering regulations that is expected to be in the hundreds of millions of dollars.

Meanwhile, Queensland parliamentary estimates hearings have revealed the husband of the state’s Assistant Finance Minister was appointed secretary of the consortium behind Queen’s Wharf.

Amanda Stoker’s husband Adam Stoker is the secretary for the Destination Brisbane Consortium.

But Queensland’s Finance Minister Ros Bates has rebuffed questions about any conflict of interest involving her deputy.

Lawyer Adam Stoker – the husband of Assistant Finance Minister Amanda Stoker – was appointed in April as the secretary for two companies: Destination Brisbane Consortium Integrated Resort Holdings Pty Ltd and Destination Brisbane Consortium Integrated Resort Operations Pty Ltd.

The consortium comprises Star Entertainment Group, Chow Tai Fook Enterprises and Far East Consortium.

Bates was quizzed during Wednesday’s budget estimates hearings by Queensland shadow treasurer Shannon Fentiman about her role in negotiations around the financial position of Queen’s Wharf.

Company extract information from the Australian Securities and Investments Commission, tabled by Fentiman, shows Adam Stoker was appointed to the roles on April 28.

Bates repeatedly declined to directly answer whether she knew of the “huge conflict of interest”, but said “a conflict management plan is in place, and the assistant minister has had no contact [with the companies involved].”

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