Star Entertainment has reached a deal to sell its 50% stake in Queen's Wharf Brisbane, ending months of speculation and negotiation, according to trade publication Casino.org's report of the company's filing.
The buyers are Chow Tai Fook Enterprises and Far East Consortium, described in the report as the two largest shareholders of the publicly traded Star Entertainment Group. They will pay Star AU$53 million (US$34.5 million) for the stake.
Deal terms
A notice filed with the Australian Securities Exchange says Star has already received AU$45 million. The remaining AU$8 million is due by 30 November 2025.
Under the terms, Star will not be required to make further debt payments related to The Star Brisbane. The company says this will save it at least AU$212 million. The Queen's Wharf property's debt is currently around AU$1.4 billion, according to the report.
Once the transaction is completed, Star will stop managing the casino and resort. Chow Tai Fook and Far East will be responsible for finding a successor, although Star must comply with certain "transition protocols". The source does not set out what those protocols involve or how long the handover will take.
The agreement also includes a Gold Coast component. Star will acquire the combined 67% position held by Chow Tai Fook and Far East in two hotels and residential towers at The Star Gold Coast, the Dorsett and the Andaz. Star also gets first refusal on future towers at the complex. The Dorsett Gold Coast has 313 hotel rooms and the Andaz has 202. The source does not disclose what Star will pay for the Gold Coast interests.
Casino.org reported in March that a tentative deal had been reached with the same buyers at the same AU$53 million price.
Lender approval and the Bally's rescue
The sale follows an April agreement under which Star, described as cash-strapped, agreed to sell a controlling stake to US-based Bally's Corporation. Under that rescue package, Bally's would pay Star AU$300 million for a 57% stake in the operator of The Star Sydney and The Star Gold Coast.
In its ASX release, Star said Bally's had approved the Brisbane sale, as had its other primary lender, Investment Holdings. The announcement said:
"The Star has received the consent of its subordinated lenders, Bally's Corporation and Investment Holdings Pty Ltd., to support the transaction on the basis of the executed terms." (Star Entertainment ASX announcement, as quoted by Casino.org)
Regulatory backdrop
According to the report, Star's financial difficulties stem from a series of government inquiries in recent years. These concluded that the company did little to keep criminal elements off its casino floors. Star was accused of, and later admitted to, failing to adequately protect its casino cages from being used by criminal syndicates to launder money.
Star was also found to have recruited high rollers allegedly linked to criminal or foreign-influenced enterprises. Regulators fined the company more than AU$200 million. AUSTRAC, the national financial intelligence agency, is considering an additional fine, the report says. No timing or amount for any further penalty was given.
This transaction concerns a land-based casino resort. Online casino services remain prohibited in Australia under the Interactive Gambling Act 2001.
The source does not say who will manage Queen's Wharf Brisbane after Star exits, when the transaction will be completed, or whether the Queensland regulator must approve the changes. Those points remain undisclosed.