The Queensland government has determined that Chow Tai Fook Enterprises (CTFE) is suitable to be associated with Star Entertainment Group’s Queen’s Wharf Brisbane property. The investigation into the matter came in the wake of Star Entertainment’s violations and apparent ties with Asian junket operators.

For context, Star Entertainment was previously found guilty of multiple AML violations and ties with influential Chinese agents. This included the Suncity Group and its now-imprisoned CEO Alvin Chau.

The past ties raised concerns about CTFE, considering that the Hong Kong-based conglomerate owns a 4.99% stake in Star Entertainment and a significant 25% stake in the company’s Queen’s Wharf Brisbane property.

In addition to its stake in Star Entertainment, CTFE also owns properties in the Bahamas and Vietnam. Its chairman, Henry Cheng, also holds a 10% stake in STDM.

In any case, the Queensland government was unable to find anything that would make CTFE unsuitable to be associated with Star Entertainment’s Queensland property.

CTFE Is Suitable, the Attorney-General Determined

Queensland’s attorney-general Yvette D’Ath said that the probe into CTFE’s business has been conducted over the 16 months leading to February 2024. According to her, the investigation was conducted by OLGR with the assistance of a third-party firm.

After what D’Ath called “considerable investigative work” into CTFE’s business and leadership, the investigation concluded that the Hong Kong-based company should be a suitable partner to Star’s property in Brisbane.

The attorney-general’s ultimate decision is that there is insufficient evidence to conclude that CTFE or its relevant associates are unsuitable.

Public statement on the suitability investigation

Queensland’s government added that the investigation was unable to confirm the allegations against CTFE. While the firm had previously dealt with a “person of poor repute,” the investigation could not find evidence to suggest that CTFE knew that the relevant person was a person of poor repute during the period of the association.

The attorney-general also learned that CTFE “lacked candor and fulsomeness” in several dealings with the OLGR. However, the attorney-general determined that this was “based on differences in cultural and organizational expectations” and not a deliberate concealment.

The attorney-general praised CTFE for its collaboration and desire to work with the regulator in the future. However, the attorney-general also warned that potential future failings may cause the Queensland government to reevaluate CTFE’s suitability to be associated with Star Entertainment’s Queens’ Wharf property.

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New South Wales (NSW) and Queensland regulators appointed special managers to oversee the company’s operations after the scandals surrounding its risk management failures and unethical behaviors. The beleaguered operator has recorded substantial progress in remedying its deficiencies but must still convince authorities it is ready to resume control.

Both Regions Expect Swift Progress

In ASX filings on Friday, Star disclosed the extension of Nicholas Weeks’ term as Manager of The Star Sydney by nearly six months, lasting until 30 June 2024. Similar to NSW, the position of the Special Manager for The Star Gold Coast and Treasury Brisbane casinos in Queensland has been extended by 12 months to 8 December 2024. 

These extensions aim to demonstrate that Star is capable of the necessary remedial actions to regain suitability and resume gaming activities as per its casino license provisions in NSW and Queensland. This change necessitates Star to demonstrate its adherence to the ongoing remediation plans and regain suitability by summer 2024.

Queensland’s decision to extend its special management follows a recent decision by Attorney General Yvette D’Ath to alter the effective date of a 90-day casino license suspension from 1 December 2023 to 31 May 2024. Meanwhile, the NSW Independent Casino Commission (NICC) clarified that its extension will likely mark the final continuation of the Manager’s term, with the option to conclude the tenure earlier if deemed appropriate.

The Operator Faces Growing Pressures

Star Entertainment managing director and CEO Robbie Cooke commented on the recent developments, expressing satisfaction with the Remediation Plan’s approval in Queensland. He stressed the need for unwavering commitment, accountability, and diligence to implement the measures successfully and prove that Star Entertainment can operate without additional supervision.

Despite the operator’s steady progress towards compliance, it faces substantial financial issues. Recent casino duty rate increases threaten to undermine the company’s long road to profitability as its FY 2022/23 results reported an unpleasant full-year loss of $1.6 million. However, all revenue-related policies must wait until the company regains regulatory compliance.

We need to regain the trust and confidence of all our stakeholders and communities and continue to have an unwavering focus on transformation.

Robbie Cooke, Star Entertainment managing director

While Star Entertainment has recorded steady progress with its remedial measures, many industry experts express skepticism about whether the operator can salvage its influence and reputation. Even if the company regains the trust of regulators, it must still struggle with mounting losses and macroeconomic pressures, meaning a return to profitability may take years.

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The “Casino Control and Other Legislation Amendment Bill 2023” is part of the government’s response to the ongoing controversy around The Star Entertainment Group’s severe regulatory oversights. The newly proposed measures include regular inquiries into casino-associated organizations, restrictions on cash usage, mandatory play breaks, and more stringent technology adoption.

These Significant Updates Will Ensure Casino Accountability

Queensland’s legislation seeks to implement the 12 recommendations outlined by Hon. Robert Gotterson, who conducted an in-depth probe into The Star’s regional operations and identified substantial regulatory breaches. These changes are part of the government’s ongoing commitment to improving the regulation and oversight of the casino industry.

The new laws prioritize reducing gambling-related harm and combating money laundering. Some proposed measures envision cash use restrictions and mandatory breaks during play to protect players while fostering responsible gambling practices. Some of these provisions mirror other Australian states, which have also rallied against problem gambling.

The bill also introduces a supervision levy on casino licensees, ensuring that the cost of regulating casinos does not burden taxpayers, as the industry covers the expenses related to oversight. This legislature builds upon last year’s law reforms that introduced pecuniary penalties for casinos up to $100 million, helping offset gambling’s negative societal impact.

The Region Maintains Its Stance against Problem Gambling

Queensland Minister for Justice and Attorney-General Yvette D’Ath emphasized that the reforms were a vital part of the government’s long-term strategy to strengthen the industry’s oversight and safeguard the interests of operators and players. She added that casino executives would have additional duties, and non-compliance would lead to significant personal penalties, hopefully fostering a lasting impact.

These reforms will continue to modernize Queensland’s gambling and casino laws to ensure they remain effective now and into the future.

Yvette D’Ath, Queensland Minister for Justice and Attorney-General

The proposed regulatory updates could not come too soon as recent data revealed that Queensland saw a sudden surge in gambling losses as bettors squandered away more than AUD5 billion ($3.2 billion). Although the new measures are a welcome step forward, the proliferation of electronic gaming machines remains one of the region’s most pressing concerns.

Queensland lawmakers hope the new legislation will complement existing gambling harm prevention efforts. The government is making impressive progress with targeted regulatory updates and increased funding for charity and education. Mandatory cashless gaming for transactions exceeding $1000 will be the next significant milestone in combating problem gaming and turning the tide against the region’s growing addiction rates.

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Gambling losses have reached an alarming milestone in Queensland, as the latest figures reveal that residents lost more than AUD5 billion ($3.2 billion) during the 2022-2023 financial year, marking an 11.3% increase from the previous year. 

Electronic Gaming Machines Account for 63.2% of Queensland’s Gambling Losses

The data, released by the Queensland government, has raised eyebrows across the state, reported ABC News. It shows that electronic gaming machines accounted for a staggering AUD3.2 billion ($2 billion), representing 63.2% of the total losses. Casino-related losses amounted to nearly AUD800 million ($512.4 million), while lotteries and wagering contributed AUD642.1 million ($411.2 million) and AUD313.8 million ($202 million), respectively, to the overall figures.

Queensland Attorney-General Yvette D’Ath expressed her concern over the rising losses, acknowledging that several factors could be contributing to this increase, including changes in spending habits. She emphasized the potential harm that excessive gambling can inflict on communities, mentioning that many Queenslanders enjoy betting, but she also noted that gambling can lead to harm.

In response to the issue, the government has implemented measures to address gambling-related harm. This includes allocating AUD7.8 million ($5 million) to Gambling Help Queensland in the state budget and enforcing regulations such as an AUD100 ($64) cash load-up limit and a minimum spin rate of 3 seconds per game for club and hotel gaming machines. 

Additionally, since July of the current year, 97% of Queensland venues have adhered to a mandatory six-hour shutdown period from 4 am.

The government is also actively working toward making cashless gaming mandatory for transactions exceeding $1000 in Queensland casinos as part of their ongoing efforts to curb excessive gambling.

Alliance for Gambling Reform CEO Calls for Urgent Action Amidst Soaring Losses

Carol Bennett, the CEO of the Alliance for Gambling Reform, expressed her astonishment at the staggering losses, especially during a time when many individuals are facing financial hardships. She urged both federal and state governments to prioritize this issue and take significant steps to protect the community from such devastating losses.

In response to the situation, the federal government recently introduced legislation to ban the use of credit cards for online gambling, addressing one aspect of the problem. Meanwhile, in Queensland, the state government regulates the number of electronic gaming machines allowed in pubs and clubs.

Clubs Queensland, an organization representing community clubs, stressed their commitment to responsible and sustainable activities. They pointed out that the revenue generated by these clubs, including those without gaming machines, benefits local organizations and essential community initiatives.

Meanwhile, in July the Palaszczuk Government in Queensland announced a new initiative during Gambling Harm Awareness Week to address excessive gambling and promote support services, partnering with Queensland Cricket to raise awareness of gambling harm and sports betting risks.

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