High-roller gamblers are steering clear of Star Entertainment Group’s three casinos, as the company’s former and current senior executives prepare to front another public inquiry into whether its Sydney casino should stay open.
The Star issued a mixed trading update to the ASX on Friday, telling investors that its premium gaming revenue had slumped 20 per cent in its properties in Sydney, Brisbane and the Gold Coast in the March quarter. The lack of high rollers pushed overall revenue down 5 per cent on the previous corresponding period to $133.6 million. However, revenue from the main gaming floors – home of the bulk of the poker machines – pushed up 5 per cent in the quarter.
Bell’s second inquiry into Star Sydney will start on Monday. His verdict regarding its suitability to operate will seal its fate.Credit: Louise Kennerley
The Star’s statutory loss after tax over the three months was $6.8 million, a significant improvement on the $50 million loss over the same period in 2023. The quarterly loss reflects $10 million in significant items such as provisions for a yet-to-be determined AUSTRAC fine and the legal costs of the second inquiry.
The company’s normalised earnings before interest, tax, depreciation and amortisation for the quarter were $38 million, which gives a clearer insight of the underlying performance of the group.
“The board and management will continue to exercise cost control with a focus on making the appropriate investment in improving the control environment,” The Star said in its update.
The Star also told the market the sale of its Treasury casino, hotel and car park was “progressing well”, and Queens Wharf Brisbane was still set to open in August.
Adam Bell, SC, was engaged by the NSW Independent Casino Commission last month to conduct a second probe into the Pyrmont business following concerns it has failed to reform its culture since the regulator suspended its licence to operate its casino in October 2022.
The business may be closed if the second inquiry deems The Star unfit to operate the casino, putting 3000 jobs and billions of dollars in revenue for the NSW government at risk.
Special manager Nicholas Weeks – who has held Star Sydney’s casino licence since it was confiscated – will be the first to give evidence on Monday. He will be followed by a series of current and former executives who have held senior roles at The Star since the last inquiry’s report was handed down.
Robbie Cooke, The Star’s former chief executive who quit two weeks ago, is not listed to appear next week but is expected to appear later this month, along with chair David Forster, who has stepped into an executive chair role until a replacement for Cooke is found.
On the evidence from the executives, Bell will determine whether The Star has appropriately responded to the recommendations from his first inquiry. He found extensive anti-money laundering and counterterrorism failings festering beneath the surface of the business once dubbed a “cleanskin”, confirming allegations unveiled in a report by this masthead and 60 Minutes in 2021.
Bell’s terms of reference are to consider the culture of the business, and whether The Star has the financial resources to ensure the viability of its Sydney casino. He will also consider The Star’s compliance with internal controls.
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