The Star Sydney logged $20b lower VIP turnover than last year, reducing group profit despite $2b increase in Gold Coast and Brisbane casinos

One of The Star’s three casinos pulled in a staggering $20 billion less from international VIPs than it did the previous year. Here’s why.

The Oasis VIP gaming area at The Star Gold Coast. Photo: Supplied

A REMARKABLE run of bad luck for international VIPs at The Star’s Queensland casinos boosted the group’s earnings in an otherwise disappointing year.

The Star Entertainment Group’s full-year profit fell 8.4 per cent to $223.7 million after a solid domestic performance was offset by an overall drop in international VIP spending.

The group said although it drew more VIPs through the doors, those who came did not stay as long or spend as much as in previous years.

The company revealed 343 executives had lost their jobs in the cuts announced in June, costing the company $18.4m in redundancies but saving it $37 million in salaries.

The Oasis VIP gaming area at The Star Gold Coast. Photo: Supplied

VIP turnover crumbled from $61.2 billion in 2017-18 to $42.4 billion in 2018-19, thanks to the Sydney casino taking $20.8 billion less than the previous year.

The losses were offset slightly by a $2.04 billion increase in turnover at The Star’s Gold Coast and Brisbane casinos, which enjoyed a sharply higher house win rate than its NSW counterpart.

While the casino group’s winnings saw it retain 1.15 per cent of its $31.6 billion Sydney VIP turnover — well below the 1.35 per cent average house win rate — the house was far more likely to win in the Sunshine State, where it enjoyed a win rate of 2.06 per cent on the $10.73 billion turnover.

$6.8B SPENT IN STAR’S VIP ROOMS YOU’LL PROBABLY NEVER SEE

The Sovereign VIP gaming area at The Star Gold Coast. Photo: Supplied

SUBSCRIBE TO THE BULLETIN: $5 A MONTH FOR THE FIRST THREE MONTHS

Revenue increased year-on-year across all measures at The Star’s Queensland properties, apart from hotel revenue, with occupancy dropping from 83 per cent in FY18 to 81 per cent in FY19, a reduction of $1 million.

Normalised earnings fell two per cent to $557 million, within the $560 million-$600 million guidance range that prompted a 16 per cent share price fall when it was issued in June.

Overall normalised revenue, which excludes the VIP win rate and other one-off items, fell 0.9 per cent to $2.16 billion.

Staff leaving The Star Gold Coast after the company announced they were cutting 20 per cent of 2000 salaried staff. Photograph: Jason O'Brien

Star cut its final dividend from 13 cents a year ago to 10 cents, fully franked.

The results revealed it had paid out $18.4 million in redundancy and restructuring costs following its June announcement it would cut up to 20 per cent of its salaried staff.

It revealed the cuts had saved about $40 million on an annualised basis, with a further $5 million in savings expected by the end of the current financial year.