(AsiaGameHub) – The Star Entertainment Group has successfully concluded an agreement with its joint venture partners concerning the Queen’s Wharf Brisbane and Gold Coast resorts.
Nevertheless, the Australian casino operator might receive reduced compensation for managing the Queen’s Wharf Brisbane integrated resort after changes were made to the establishment’s fixed monthly operator fee.
Chow Tai Fook Enterprises Limited (CTFE) and Far East Consortium International Limited (FEC) have signed binding long-term agreements with The Star, which is currently operating under new management after the completion of a A$300m strategic investment by Bally’s Corporation and Investment Holdings late last year.
The first phase of the transaction permits The Star to divest its 50% equity stake in the Destination Brisbane Consortium (DBC), which encompasses the Queen’s Wharf resort. The second phase pertains to the Destination Gold Coast Consortium (DGCC) and additional Brisbane properties that are either fully or partially owned by the operator.
The Star has acquired full ownership of The Star Gold Coast assets, whereas CTFE and FEC are set to assume control of the Treasury Hotel and the Charlotte Street Car Park, both situated near the Queen’s Wharf resort.
Monthly fee set at $1.5m?
As stipulated by the transaction documents, the operator has finalized the sale of its 50% equity interest in DBC. Consequently, the fixed monthly operator fee stipulated in the DBC casino management agreement (CMA) has been revised and finalized.
Effective immediately, the DBC casino operator fee due to The Star will consist of a fixed annual sum of AUS $18m, paid monthly (A$1.5m per month), as well as a performance-based incentive fee made up of two components, both linked to EBITDAM.
The DBC also retains a performance termination right, enabling it to end the CMA under specific performance-related conditions, subject to a minimum of 90 days’ written notice.
Apart from these modifications, the essential terms of the transaction remain unchanged in all material aspects.
The completion of the first stage, involving the divestment of the Queen’s Wharf resort, fulfills the requirements of the refinancing arrangement The Star secured with WhiteHawk Capital Partners last month. Consequently, the company’s guarantee associated with the Queen’s Wharf debt facilities has been fully released.
Regarding the second phase, which involves the DGCC and other Brisbane properties held by The Star, the operator noted that efforts to finalize it are ongoing. The conditions precedent are anticipated to be met during the second half of 2026, and no later than 31 March 2027.
The Star aims to ‘strengthen’ in 2026
The Star seems to be honoring its commitments to investors after recently expressing optimism for the upcoming year during its H1 FY26 results announcement in March, following a turbulent end to 2025.
The Star recorded A$585m in normalised net revenue for the first half of FY26 and a net loss exceeding A$75m. The new management team has implemented changes to operational and marketing strategies, introduced customer-focused initiatives, and enacted further cost reductions.
Bruce Mathieson Jnr, Group Chief Executive Officer of The Star, remarked: “We are streamlining our corporate office, and essential support functions will be handled at the property level in Sydney, Gold Coast, and Brisbane. These changes are designed to bolster our financial position and support long-term success.
“We continue to drive appropriate cost-out initiatives and are exploring and implementing measures to draw customers to our venues. We are dedicated to following a transparent, practical, and sustainable path that ensures our remediation plan meets the expected standards, while fostering consistency, embedment, and demonstrable maturity throughout the group.
“Our properties hold immense potential, and we are committed to transforming The Star into leading entertainment destinations.”
Casino licence suspension prolonged
However, the New South Wales Independent Casino Commission (NICC) has recently extended the casino licence suspension for The Star Sydney. Following a pathway-to-suitability submission received by the NICC from The Star Sydney on 12 March, it was confirmed that the operator is not yet seeking a licence determination.
The suspension affecting The Star Sydney has been in effect for more than three years, after the operator was deemed unfit to hold a casino licence. This determination followed reviews commissioned by the NICC and conducted by Adam Bell SC in October 2022 and August 2024, which uncovered numerous regulatory failures.
Nicolas Weeks was appointed as the manager for The Star Sydney to enable gaming operations to persist at the venue. This latest extension ensures the casino licence suspension remains active, with Weeks’ tenure now extended until 30 September 2026, unless terminated earlier.
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