The Star Entertainment Group announces more cash losses as staff, shareholders in limbo

ASX-listed gambling giant The Star Entertainment Group has revealed its latest financial results, noting ‘material uncertainty’ over its ability to stay afloat. Read why

ASX-listed gambling giant The Star Entertainment Group has revealed its latest financial results, noting a “material uncertainty” over its ability to stay afloat.

The group made $299m in the second quarter of the financial year, 15 per cent less than in the first quarter, despite revenue growing at The Star Gold Coast, its latest financial report has revealed.

The embattled group – and its 9000 staff – had been increasingly on edge since announcing the company had spent more than $100m cash in three months.

In a statement to the ASX Monday morning, Star said revenue had fallen 15 per cent on the previous quarter, due to the closure of Treasury Brisbane Casino and “continued softness” at The Star Sydney following the implementation of mandatory carded play. The decrease was partially offset by revenue growth at The Star Gold Coast, it said.

The statement said, while negotiations with its lenders continued, there was “no certainty” they would be successful.

“In the absence of one or more of those arrangements, there remains material uncertainty as to the Group’s ability to continue as a going concern,” it said.

Generic photos of The Star Gold Coast. Picture: Glenn Campbell

While revenue was down, so were costs, which fell by $52m due to “reduced activity” and the closure of the Treasury Brisbane, which saved $22m.

During the three months to December 31, Star paid the first $5m instalment of $15m to the NSW Government and made equity contributions of $36m to the Destination Brisbane Consortium Integrated Resort joint venture, aka Queens Wharf.

It had $78m available cash as of December 31.

The Star has faced pressure from lenders, anger from shareholders, ambiguity from governments and increased gambling regulations which were drastically increasing costs.

Star CEO Steve McCann last week said the group could return to profitability if given more “time and support”, but was realistic about the enormity of the turnaround task.

“For Star as a corporate entity to get through this, and for shareholders’ and creditors’ interests to be fully protected, and for our employees to have the job security they’re after, requires a meeting of minds of a significant range of stakeholders – it’s complicated,” he said.

“So we need to have those stakeholders come together to deliver an outcome.”

Star Entertainment Group chief executive Steve McCann

The company was also contending with a looming Austrac fine — which had an unknown date or amount.

Recent fines from the regulator include $67m to SkyCity in 2024 and $450m to Crown in 2023. It slugged Westpac $1.3bn in 2020.

The Star made a financial provision of $399.5m in 2024 – which it hoped would cover the Austrac fine as well as a suite of other fines, underpaid taxes, ASIC proceedings, a looming class action, consultant costs and legal fees.

It had also been in a battle to keep its Queensland casino licence and to refinance $1.5bn of its debt for Queen’s Wharf.

Shares in the Star fell from 14c at open to trade at 13.8c by 10am.