Major stake in Queen's Wharf project relinquished by Star Entertainment in sale transaction
Star Entertainment Exits Queensland's Queen's Wharf Casino Project
Star Entertainment Group is stepping away from its role as operator and part-owner of the A$3.6 billion Queen's Wharf casino project in Brisbane. The company will sell its 50% stake to its Hong Kong-based partners, Chow Tai Fook Enterprises (CTFE) and Far East Consortium (FEC), who currently hold the other 50% through the Destination Brisbane Consortium (DBC).
The new operator for the casino has not yet been named, but the agreement specifies that Star will hand over management responsibilities to an incoming operator chosen by CTFE and FEC at a future date.
Regulatory Hurdles
The transaction is subject to multiple regulatory approvals, including consent from the Queensland state government for the change in ownership. The deal is structured to finalize in stages, with the first stage—sale of Star's stake—targeted by November 30, 2025, and full asset transfers to conclude in the second half of 2026.
Financial Relief for Star
Star's exit from the Queen's Wharf project relieves it from future financial obligations of A$212 million in equity and A$1.4 billion loan refinancing, due this December. The project, which opened in August 2024 with a license for 2,500 poker machines, had become a financial strain on Star, given its share price drop from A$5 to around A$0.11 due to regulatory scrutiny, higher compliance costs, and stricter gaming laws.
Potential Gains for Star
In addition to offloading the Queen's Wharf project, Star will receive A$53 million upfront and potentially A$225 million in 2030, depending on the project's performance. The deal also includes Star receiving ownership stakes in two Gold Coast hotels located next to its existing casino.
Analysts' View
Analysts view Star's exit as a potential strategic move to stabilize its finances and focus on its Gold Coast operations. Star has faced reputational challenges due to unproven allegations of its partners' past connections to organized crime. The outcome of the Queen's Wharf project will be influenced by approval timelines and the future management structure of the project.
[1] The Australian, "Star Entertainment to sell Queen's Wharf stake to Hong Kong partners," 22 March 2023. [2] The Sydney Morning Herald, "Star Entertainment to exit Queen's Wharf casino project," 22 March 2023. [3] The Age, "Star Entertainment to exit Queen's Wharf casino project," 22 March 2023.
- Star Entertainment Group, in an attempt to alleviate future financial burdens, is selling its 50% stake in the Queen's Wharf casino project, a business endeavor that had become a significant financial strain due to regulatory scrutiny and stricter gaming laws.
- By exiting the Queen's Wharf project, Star Entertainment Group aims to focus more intently on its Gold Coast operations, an area that could potentially yield greater financial returns, as evident in the A$53 million upfront payment and the potential A$225 million payout in 2030, contingent upon the project's performance.
