‘Catastrophic for our city’: The cost of The Star falling

Business Sydney executive director Paul Nicolaou warns that it could be “catastropic” for Sydney, should Star Entertainment collapse.

The NSW Government would forego hundreds of millions of dollars in gaming tax revenue, thousands of jobs would be lost, and Sydney’s international reputation would cop a “massive hit” if troubled Star Entertainment collapses.

The warning, from Business Sydney executive director Paul Nicolaou, comes as the embattled casino giant scrambles to stay afloat.

“The collapse of Star Entertainment would be catastrophic for our city,” Mr Nicolaou said.

“At risk is everything from the wonderful Lyric Theatre, two hotels, restaurants and small businesses,” Mr Nicolaou wrote in The Daily Telegraph today.

He said The Star is vital to Sydney’s place as a global city, and called for the Minns Government to consider further support for the embattled casino operator.

“Major venues such as The Star are part of the infrastructure that supports large-scale tourism, conventions, sporting events, and theatre.”

It also supports 3,000 jobs in NSW, which could be lost if the casino collapses.

Star chief executive Steve McCann has been pleading for help from governments to stay afloat, with the company telling the Australian Stock Exchange on Monday that there is “material uncertainty” about its future.

\The Star Casino building in Pyrmont. Picture: NCA NewsWire / Damian Shaw

Mr Minns this week said that he does not have any more money for The Star when public sector unions were clamouring for cash.

“We’ve got funding requests right across NSW, from roads to psychiatrists to nurses to the railways,” he said this week.

“I mean, I don’t have money for casinos, I’m sorry.”

In refusing any assistance, including deferring taxes, Mr Minns has highlighted how his Treasurer Daniel Mookhey gave the casino a $300 million tax lifeline last year.

At the time, Treasury expected to raise $2.7 billion in revenue from casino taxes levied against The Star over 10 years.

If the casino closes, the state government could end up losing massive amounts of tax revenue generated from The Star’s poker machines.

Under the rules governing NSW pokies, The Star’s entitlements cannot be sold to pubs or clubs.

They also cannot be sold to rival Crown Casino which is banned by legislation from operating the machines at Barangaroo.

Troubled resort and casino operator Star Entertainment. Picture: AFP

“The NSW Government is not considering any proposal to install poker machines at Crown Casino,” a spokesman for Gaming and Racing Minister David Harris said last night.

The Telegraph also understands that there are concerns around the future of multiple hospitality venues within Star Casino.

The majority of the restaurants, bars and hotels within the venue are run by Star Entertainment, including the five-star Darling Hotel and The Star Grand Hotel, which are both owned by the casino group.

Should the company be forced into administration there are concerns the hospitality venues under the Star umbrella would be adversely effected.

In an update to the market on Monday, Star said that revenue had plunged in the December quarter.

It only had $78 million in cash available at 31 December.

Queensland Premier David Crisafulli has not ruled out stepping into hand The Star a lifeline, but suggested the company should raise funds by selling off assets.

However, with Star Entertainment still facing a money laundering fine from financial regulator Austrac which could exceed $100 million, industry sources expect buyers will not be banging down the door to take over if there is move to break up the assets.

Originally published as ‘Catastrophic for our city’: The cost of The Star falling