Australian operator Star Entertainment recently pleaded guilty in Queensland court to seven charges of illegally allowing guests to use credit cards to purchase gaming chips, which was first noted in the inquiry led by Robert Gotterson, SC, late last year.
According to the Queensland government, Star allowed Chinese patrons to use China UnionPay bank cards for gambling funds at its Gold Coast and Brisbane properties, which is against state law (the practice is also banned in China).
Per Queensland Attorney General Shannon Fentiman, Star allowed this practice to happen during two separate stints—first from June 2017 to December 2018 and then again from March 2022 to April 2022.
Additionally, the embattled operator then went a step further and attempted to cover up the transactions and disguised them as hotel expenses when approached by National Australia Bank (NAB).
According to Gotterson’s review, Star admitted that the UnionPay cards “were swiped at terminals at the hotel but were then used to fund gambling,” which “‘obscured the true nature of the transactions and masked the fact that funds were used for the purpose of gaming from UnionPay and Chinese financial institutions.’”
The penalties for the charges will be handed down at a hearing on June 2.
In addition to the upcoming penalties, Queensland regulators already fined the company AU$100 million and put a third-party “special manager,” Nicholas Weeks, in charge of the Brisbane and Gold Coast casinos back in December of last year.
If that wasn’t enough, a slew of former Star executives and board members, including former chairman John O’Neill and former CEO Matt Bekier, are also facing additional legal challenges from the Australian Securities and Investments Commission in the country’s Federal Court over anti-money laundering and counter-terrorism funding (AML/CTF) violations.
In efforts to stop the regulatory bleeding, the company is said to be shopping the Sheraton Grande Mirage Resort Gold Coast hotel, which Star owns in conjunction with Hong Kong-based partners Far East Consortium and Chow Tai Fook.
The listing price, according to details from real estate firm Colliers reported by Inside Asian Gaming, is expected to surpass AU$200 million, which would go a long way in stamping out the increasing list of fines that the operator has stacked in the last 18 months.
The hotel sits on a plot that covers approximately 8.5 acres, and is located a little under 5 miles from Star’s Gold Coast casino.
Dan McVay of McVay Real Estate told IAG that “all rooms and facilities within the hotel remain at the highest of standards, though an incoming investor has a multitude of upside positioning strategies that can be deployed, both to the rooms as well as the extensive F&B and leisure facilities at the resort.”
McVay added that he is “sure that there will be strong domestic and international interest to be the next custodian of this piece of history.”
Star had first indicated that it might put the hotel up for sale in its most recent earnings update earlier this year, in response to proposed tax increases in New South Wales that, if enacted, could spell disaster for the company’s balance sheet moving forward.
Despite the controversy and uncertainty, however, the company is still slated to open its multibillion-dollar Queen’s Wharf Brisbane development before the end of the year.
