Fagan: Government’s still rolling dice with Star’s partner, but where will the ball land for Queen’s Wharf?
Despite a full-scale inquiry into the suitability of Star Entertainment to operate Brisbane’s new gambling showcase at Queen’s Wharf, the government continues to avoid key questions, writes David Fagan.
Star is facing potentially severe penalties
The hotel and apartment towers of Queen’s Wharf and the bridge linking Southbank’s parklands to one of the nation’s biggest gaming floors are slowly reshaping the city skyline – but not as slowly as the inquiry into the suitability of one of its owners to hold a casino licence in Australia.
Twelve weeks after the Attorney-General, Shannon Fentiman, asked the casino regulator to take a fresh look at the Chinese retailer Chow Tai Fook, a substantial investor in both Queen’s Wharf and The Star Entertainment group which will operate its casino, there is still little to no movement.
The Office of Liquor and Gaming Regulation, which approved Chow Tai Fook’s investment in 2015, has told InQueensland it is yet to find an “independent external party” to conduct he investigation into its own regulation. My suspicion: they’re hoping the problem will fade away.
But it won’t, because the coming weeks will be a trying and attention-grabbing period for the Queens Wharf development and its promise to transform Brisbane into a tourism hub.
Its operator, and currently the nation’s biggest casino operator, Star Entertainment, has until November 25 to show cause why it should not be stripped of its licences in Brisbane and the Gold Coast. Three days before, its current directors have to front shareholders at what will be a testy annual meeting on the Gold Coast – even though it is no longer encumbered by a board which has deserted what looks like a sinking ship.
At the very least, it faces a $100 million fine in Queensland for the poor behaviour identified by former Supreme Court Judge, Robert Gotterson, SC. Still to come are actions from Austrac which is running its eye over the use of Star’s casinos in Sydney, the Gold Coast and Brisbane for money laundering.
And then there are the issues of cost overruns in the Brisbane development which is running behind in construction. Shareholders will no doubt be interested in what the declining outlook for Chinese tourism, the increase in running costs and the difficulties hiring staff just about anywhere mean for Star’s prospects and its aspirations for Brisbane.
The suitability of Chow Tai Fook is crucial here. Along with another Chinese company, Far East Consortium International, it is a 50 per cent owner of the hotels and casino components of Queen’s Wharf. The two Chinese companies each own half of the apartment developments that accompany the casino.
They also each own 5 per cent of Star and have an agreement that they will maintain their shareholding if – as seems inevitable, given the construction cost increases and the added regulatory costs – the company goes to the market for fresh capital.
The allegations about Chow Tai Fook are historic and untested but have been aired through the investigative work of the ABC. Thank goodness for journalists! The Attorney-General Shannon Fentiman’s integrity concerns were strong enough in August to immediately ask the OLGR to conduct a fresh investigation.
This was in the midst of the Gotterson inquiry which was set up after the mutterings about Star – and the entire Australian casino industry – became a roar through inquiries in both Victoria and NSW. It’s noteworthy that the Attorney-General was not willing to stand behind her regulator in August but is still waiting in November for it to find an independent investigator to check its earlier work.
InQueensland asked her three questions: 1. Was she satisfied with Chow Tai Fook’s suitability before the probity issues were raised three months ago; 2. Is she content the regulator still hasn’t appointed an independent investigator, and; 3. Is she satisfied the regulator is up to the task?
She answered different questions, replying through a spokesperson that the inquiry was ongoing, that the government was committed to “ensuring Queensland casinos operate lawfully and in a way that maintains high standards of integrity and public confidence”. And as for the regulator, she relied on the view of Gotterson who was never tasked with looking at it this issue: “He has also noted that the OLGR has shown vigilance throughout this process.”
So how long will it take to establish Queen’s Wharf is in the hands of investors who satisfy the concerns implied by the Attorney-General’s rapid call for an inquiry? It’s anybody’s guess but if I was a betting man (and I am in occasional small amounts), I’d say Easter – by which time the bridge will have crossed the river, even though there’s still just a construction site on one end of it.