Australia’s Star Entertainment faces losses amid decline in premium players

Jenny Ortiz 1 month ago
Australia’s Star Entertainment faces losses amid decline in premium players

Australia’s Star Entertainment Group reported a net loss of AU$6.8 million (€4.1 million) in the March 2024 quarter, primarily due to a decline in premium players’ patronage. 

According to its latest quarterly trading update, the company disclosed a 19.3% year-on-year decrease in revenue from premium gaming rooms at The Star Sydney. Similarly, premium gaming revenue dropped by 20% at The Star Gold Coast and 28% at Treasury Brisbane. 

Slight improvement in main gaming floors 

Despite the decline in premium gaming, there was a marginal improvement across the main gaming floors. The Star Sydney witnessed a 5.4% year-on-year increase, The Star Gold Coast 4.6%, and Treasury Brisbane 6.4%. However, net revenue still fell by 4.6% compared to the previous year’s March quarter. 

Fluctuating EBITDA, rising costs 

The company’s update also stated that normalized EBITDA for the quarter showed fluctuations, with AU$20.2 million (€12.3 million) in January, AU$10.3 million (€6.25 million) in February, and AU$7.4 million (€4.9 million) in March. 

Star Entertainment Group noted increasing costs related to strengthening its risk, controls, and transformation teams. Costs rose from AU$90.3 million (€55 million) per month in the first half of the financial year to AU$92.1 million (€56.1 million) per month in early 2024. 

Second inquiry into The Star Sydney’s suitability 

On Monday, the NSW Independent Casino Commission (NICC) announced a second inquiry into The Star Sydney’s suitability to hold a casino licence. This decision follows concerns over the effectiveness of Star’s remediation efforts. 

The inquiry will run for 15 weeks with a final report due on May 31. The aim is to assess The Star’s capacity and competence to meet regulatory standards and regain its casino licence. 

Stakeholder implications 

The NICC emphasized the importance of this decision for The Star, its employees, stakeholders, and the wider community. It aims to ensure that The Star fulfils its financial obligations and adequately funds its remediation program. 

The decision for a second inquiry stems from previous findings, including issues related to the illegal use of China UnionPay cards, dealings with Asian junket operator Suncity Group, and responses to audits of anti-money laundering and counter-terrorism financing controls. 

Trading halt 

In response to the NICC’s announcement, Star Entertainment Group entered a trading halt on Monday morning. This detailed overview showcases the financial challenges facing Australia’s Star Entertainment Group and the regulatory scrutiny it faces as it seeks to address these concerns. 

Upcoming SiGMA event: BIS SiGMA Americas 2024, find all the details here.

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