Star Given A Little More Time By Regulators Before Closure Of Sydney Casino

Australian casino operator Star Entertainment recently received a reprieve from the New South Wales (NSW) regulators after months of uncertainty over tax rate increases that posed a threat to its business. Regulators in NSW and Queensland, where The Star operates casinos in Brisbane and the Gold Coast, extended the terms of their respective independent managers. This extension provided the company with more time to undertake necessary remediation steps.

To navigate the challenges it faced, The Star Entertainment Group underwent a strategic review, which led to a refinancing process. The company secured $450 million in new debt facilities from Barclays and Westpac. This move not only strengthened its financial position but also demonstrated the confidence of these financial institutions in the company’s future prospects. Barrenjoey Capital Partners played a crucial role in conducting the strategic review.

The casino operator is fully committed to its transformation journey and has developed a comprehensive remediation plan for its operations in NSW and Queensland. The plan is designed to address the issues the company faced, including fines levied by financial crimes watchdog AUSTRAC, class actions, and revoked state casino licenses. The implementation of this multi-year program requires utmost rigor and discipline, and The Star Entertainment Group is dedicated to tracking and being held accountable throughout the process.

A spokesperson for The Star Entertainment Group emphasized the company’s unwavering focus on transformation. They stated, “We know the implementation of the remediation plan in NSW and Queensland requires the utmost rigour and discipline. This plan will track and hold us accountable throughout the multi-year program we are committed to delivering.”

In the face of challenges, The Star Entertainment Group’s CEO, Robbie Cooke, made a significant decision. He had previously considered selling the company’s Sydney business after a substantial reduction in the value of its three casinos. However, in August, he announced that selling the Sydney business was off the cards, indicating a shift in the company’s strategy.

Despite the hurdles, The Star Entertainment Group demonstrated impressive revenue growth in the last financial year. Its revenue climbed by 22 percent to $1.9 billion, a remarkable achievement considering the impact of COVID-19 restrictions on the previous year’s figures. The company’s statutory earnings, excluding any significant items, exceeded previously announced guidance, reaching $317 million for the year ending June 30. This marked an increase of $79 million.