Hong Kong investors Chow Tai Fook Enterprises and Far East Consortium, which each own 25 per cent of the Brisbane complex, had agreed to buy Star's 50 per cent stake for $53 million. Star would have also taken full control of its Gold Coast project.

Now, the two firms have issued Star with a notice to terminate the deal.

Last week, Star shareholders separately approved a $300 million rescue deal backed by US casino giant Bally's and existing investor Bruce Mathieson.

"Since the recent general meeting, the parties continued to negotiate with a view to finalising the long form documents but, as of this morning, have not reached an agreement on the outstanding commercial issues," the company said in a statement to the ASX.

Despite the other parties backing out, Star said it will continue negotiations.

The termination notice will come into effect next Monday unless it is withdrawn within five business day.

In a statement to the Hong Kong stock exchange, Far East Consortium said Star must repay $10 million to the parties within 30 days of the termination, and failing that, it must transfer its third stake in the Gold Coast hotel project.

Star Entertainment did not immediately respond to an email seeking confirmation of the repayment details.

'Cliff-top poker' for Star's survival

Star first entered the deal with its the Hong Kong investors in early March, after months of warnings about its financial future — and prior to the bigger deal struck with Bally's and the Mathiesons.

Financial commentator Stephen Mayne told ABC News Chow Tai Fook Enterprises and Far East Consortium appeared to be trying to wrangle some last-minute concessions from the Queensland government before agreeing to proceed with their proposed bailout of the Queen's Wharf project.

"[It's] loaded with $650 million of its own debt, is still less than 50 per cent operational and requires hundreds of millions of dollars in additional capital expenditure to complete," Mr Mayne noted.

The deal falling over would leave Star saddled with those costs, as it attempts to turn its business around with the backing of Bally's.
"[That's] something which wasn't contemplated when shareholders, including the two Chinese joint venture partners, last week voted overwhelmingly in favour of US casino company Bally's and billionaire Bruce Mathieson effectively taking control of Star with a $300 million capital injection," Mr Mayne said.

The casino operator also remains embroiled in legal challenges, with the financial crimes regulator AUSTRAC seeking a $400 million penalty against the company for alleged money laundering, in a court case that kicked off earlier this month.

Mr Mayne said that, from a shareholder perspective, Star has faced a "five-year pile on" from the Queensland, NSW and federal governments, which has left it crippled by "huge fines, higher taxes, licence suspensions, multiple inquiries and the imposition of cashless gambling, which doesn't apply at competing pubs and clubs".

"It's time all three governments sat down with the company and its Queen's Wharf joint venture partners and thrashed out one over-arching deal that sorts out the mess and resolves who will own and run the Sydney, Brisbane and Gold Coast casinos over the longer term," he said.