The Queensland government has endorsed a casino owner's side venture with an associate of one of the world's most notorious gangsters.
It also accepted Chow Tai Fook Enterprises (CTFE) did not know another partner in an overseas casino was a "person of poor repute", even after a high-profile inquiry found he was "clearly" linked to organised crime groups.
The government's backing of the Hong Kong conglomerate as a suitable partner in the $3.6 billion Star Brisbane casino venture, which is due to open this month, has been branded "laughable" by gambling reform advocates.
It came despite a 16-month investigation by the state regulator confirming revelations by the ABC about CTFE's business dealings with organised criminals and their associates.
This included an interest in a Macau company with a longtime friend and business partner of US-sanctioned crime boss "Broken Tooth" Wan Kuok Koi.
Queensland's Office of Liquor and Gambling Regulation (OLGR) also confirmed CTFE failed to disclose its stake in a Vietnam casino with "Broken Tooth" Koi's reputed protégé, Alvin Chau, who is now in jail for fraud, illegal gambling and criminal association.
Under Queensland law, casino licensees must not have "any business association" with anyone "not of good repute having regard to character, honesty and integrity or has undesirable or unsatisfactory financial sources".
However, Attorney-General Yvette D'Ath found in May "insufficient evidence" that CTFE's associations made it unsuitable for a casino licence.
The government has cited legal difficulties targeting CTFE over partners who were not currently doing business with a criminal, or whose criminal activities were only "rumour, suspicion or hearsay" prior to their arrest.
Her comments came years after a NSW casino inquiry made a key finding against Chau — before his arrest.
Tim Costello, chief advocate of the Alliance for Gambling Reform, said CTFE had been given "an utterly implausible tick" by Queensland authorities who were not "to be trusted reviewing [their own decisions]".
"They have failed consistently in the past. Laugh in their face at anything they say."
‘Don’t have yum cha with gangsters’
The regulator found CTFE was not tainted by association with Macau businessman Ao Ieong Lok Hei, despite his relationship with the infamous Chinese triad leader, "Broken Tooth" Koi, spanning three decades.
At the height of Macau’s deadly gang wars in the 1990s, Mr Ao Ieong was a director of the crime boss' “charitable foundation”.
In 2013, after the gangster got out of jail, Mr Ao Ieong transferred company shares to him.
"Broken Tooth" Koi was sanctioned by the US in 2017 for his role in organised crime across Asia and the Pacific, including bribery, corruption and misappropriation of state assets.
Mr Ao Ieong is now a director of the CTFE-backed China Diamond and Jewellery Exchange, and sits on the company board alongside 'Conroy' Cheng, CTFE's executive director and vice chairman.
The ABC is not suggesting Mr Ao Ieong is involved in criminal activity.
But by his own account, he is the gangster's friend and confidant, hearing the inside story on things like the formation of the World Hongmen History and Culture Association, which is now sanctioned by the US as a front for organised crime.
"We meet often. We just had yum cha today during lunchtime," Mr Ao Ieong told the ABC in 2022.
"We are friends. But we don't have any business connections or cooperation anymore."
This led the Queensland regulator to conclude CTFE had a "legitimate business association" with Mr Ao Ieong.
"The investigation found insufficient evidence that a historical business association between [Mr Ao Ieong] and Wan Kuok Koi (Broken Tooth) had continued past 2012," an OLGR spokeswoman said.
Monash University associate professor and gambling expert Charles Livingstone said he would be "astonished" if other state regulators "would countenance this sort of association" for casino owners.
"These sorts of associations have a way of growing rapidly into full blown corruption, money laundering and scandal," he said.
"Maybe there's no particular business relationship at this point in time but one could generate rapidly and people with these sorts of associations shouldn't be anywhere near these businesses.
"It's about having associations with people of good standing in the community and those kinds of people generally don't have yum cha with gangsters."
Casino partner 'clearly' linked to organised crime
The Queensland government has excused CTFE's lack of "candour and fulsomeness" with the regulator, citing "differences in cultural and organisational expectations".
CTFE failed to tell the government about its partnership in the Hoiana casino in Vietnam with Suncity, the VIP gambling "junket" controlled by Alvin Chau.
It did not cut ties with Chau until after his arrest in November 2021 for fraud, illegal gambling and criminal association, which led to an 18-year jail sentence in Macau.
CTFE's partner in the Brisbane casino, Star, had been aware of criminal allegations against Chau for several years.
In 2019, Star's board of directors was handed a due diligence report from the Hong Kong Jockey Club, which stated that Australian Federal Police suspected Suncity was laundering up to $2 million a day.
"Alvin Chau is alleged to be a member of the Macau faction of the 14K triad society and the follower of former 14K leader Wan Kuok Koi (known as Broken Tooth Koi)," the report said.
In May, the Queensland Attorney-General Ms D'Ath, on advice from a King's Counsel, found there was not enough evidence to show that CTFE knew of Chau's ill-repute before his arrest.
The allegation "lacked probative value given it was based on suspicion, rumour, and hearsay", she said.
"On that basis, the investigation did not substantiate any motive for CTFE to intentionally conceal that business association from OLGR."
This is despite a NSW casino inquiry making public findings against Chau in February 2021 — 10 months before his arrest.
The inquiry, led by retired Supreme Court Justice Patricia Bergin, found there were "clearly links between Mr Chau, the Suncity Junket and organised crime groups".
Asked by the ABC if her inquiry findings should be considered "suspicion, rumour, or hearsay", Ms Bergin declined to comment.
An OLGR spokeswoman said that "careful consideration was given to the materiality and probative value of all available evidence".
A CTFE spokesman said that "all of these issues were examined over a 12-month period as part of the investigation by the OLGR — an investigation in which we cooperated".
"CTFE understands the important role the OLGR plays in maintaining the integrity of the Queensland gaming environment," he said.
"CTFE is a global investor with investments in 27 countries and is committed to the highest operating standards.
"We have a long-term interest in investing in Australia, are committed to the Queen's Wharf project and playing a part to help transform Brisbane ahead of the 2032 Olympics."
'Pub test surely not met'
CTFE's partner Star has been mired in its own money laundering and criminal infiltration scandals that have put its casino operating licences at risk in NSW and Queensland.
Associate Professor Livingstone said the new Brisbane casino was an "omnishambles".
"Basically, you've got these people who have made this massive investment, the centrepiece of which is a fairly substantial casino, and all of the players have huge clouds over their heads," he said.
"I'm not one to invoke it but the pub test would surely not be met by any of this."
Mr Costello said giving the new Brisbane casino owners a green light "not only defies logic but is utterly laughable".
"My question is, what is going on with the Queensland government?" he said.
"[It's] only duty with a casino licence is to protect the public. This is an open and shut case, in my view."
