Star Casino blames high rollers’ ‘lucky run’ for its $80 million profit downgrade

WHOEVER said the house always wins hasn’t been to this high roller’s room, where punters have had an incredible $80 million ‘lucky run’.

Daniel Craig is James Bond in Casino Royale Picture: SUPPLIED

WHOEVER said the house always wins hasn’t been to The Star casino in Sydney lately.

Six high rollers have enjoyed an incredible ‘lucky run’ at the establishment, denting The Star Entertainment Group’s profits for the second half of 2015.

Chief executive Matt Bekier described the VIP gambler win rate as a “freakish” statistical event, as shareholders grappled with the news its profits have taken a hit of almost $80 million.

“We’ve looked at it every which way,” Mr Bekier said.

“We’ve looked at the distribution of bets, we’ve looked at the players, we looked at who won, we understood the lifetime history of the players that won — and it’s just bad luck.”

The high rollers are understood to have secured the windfall while playing baccarat, the game favoured by Chinese gamblers, betting up to $500,000 a hand.

Their brush with fortune means net profits for The Star group, which also owns Brisbane’s Treasury casino and Jupiters on the Gold Coast, fell by 37.9 per cent, instead of rising by 26.1 per cent to $142 million as forecast.

It’s not the first time a freak event has threatened an Australian casino’s bottom line. In 2014, rival operator James Packer declared that “the punters are killing us” after a lucky run at his Perth and Melbourne establishments.

Mr Bekier said he expected things to even out for The Star group in due course.

“Bad luck and good luck are not sustainable, so this will normalise,” he said.

“There’s six very, very happy guests who we cannot wait to welcome back to our properties.”

The Star’s business models factors in a win rate of $1.43 from every $100 that high rollers bet, but this has recently fallen to 88 cents.

A lucky game of baccarat took The Star group by surprise.

But Mr Bekier said “strong operational momentum” was buoying the company into the early part of the second half of the financial year.

He said that, aside from the win rate against VIP gamblers, the group’s casinos and hotels had performed well, with the international VIP gambling business tracking in line with management’s expectations so far.

And the domestic gaming businesses generated strong revenue growth on the back of improved facilities, loyalty programs, better marketing, and stronger economic conditions in each of the group’s markets.

Mr Bekier said disruption from expansion and refurbishment work at The Star Sydney and Jupiters Gold Coast would have some impact on revenue and earnings throughout the second half.

The Star group is spending up to $1 billion on further redeveloping its Sydney casino and hotel complex, and up to $850 million on the Gold Coast.

The group is also building a new $3 billion casino and resort complex at Queens Wharf in Brisbane, to replace the Treasury casino.

Mr Bekier said the group was looking towards the long-term prospects of the tourism sector in Australia, especially given the recent free trade agreement with China.

Shares in The Star Entertainment group were steady at $5.36 at 12.17pm.