The Star’s private gaming room proves a winner

Star Entertainment says a private gaming room in Sydney, and a dip into horse racing, have helped boost its first quarter.

The Star's CEO Matt Bekier. Pic: Chris Pavlich

The Star Entertainment Group’s domestic business has reported a quarterly boost, as chief Matt Bekier also says the business has been “substantially” derisked following strong support for its private gaming room.

Mr Bekier provided a trading update to shareholders at The Star’s (SGR) annual general meeting on the Gold Coast today.

For the period from July 1 to October 21 group domestic revenue was up 6.7 per cent on the prior comparable period.

The update has fuelled support for The Star’s share price today, which is up 2.3 per cent at $4.85.

Mr Bekier said he was pleased that the revenue increase was recorded at both the Sydney and Queensland resorts.

“If we are able to top the first quarter with that in the domestic business we are pretty positive about the rest of the year,” he said.

“What is also pleasing is Sydney is holding up because the temporary private gaming room, the Sovereign Room, is performing well.

“A lot of our investors were worried about what that would do, so the room is doing well and that has derisked the year for us substantially.”

Mr Bekier also told The Australian, after the AGM, that The Star reported a “little boost” the week of the horse racing event, The Everest, in Sydney.

“Horse racing resonates well with our Chinese high rollers,” he said.

“A lot of them are starting to buy into horses, so it aids our ability to provide them with money can’t buy experiences, such as taking them to the stables before to see the horse train.

“They made a week of it and quite a few went off to horse studs and looked at horses.

“We are also sponsoring the Magic Millions on the Gold Coast in January. The purpose is to create experiences for the growing tourist pool.”

The 6.7 per cent increase reported in domestic revenue for the first quarter would indicate that the local economy was “reasonably good”, according to Mr Bekier. But he also said that The Star was doing better in gaming than non-gaming, which illustrated that the pure discretionary “going out dollar” was a little bit harder to get.

“The consumer spend is probably a little bit softer than you would think based on those (revenue) numbers,” he said.

“Where we have competitive advantage through our loyalty system or getting customers to consolidate their play with us has been driving the gaming business.”

The trading update also revealed that in the first quarter of fiscal 2019, the International VIP Rebate business normalised revenue was in line with the prior comparable period, but the statutory result was up strongly on the back of an improved win rate.

Mr Bekier outlined to investors at the AGM that as always, the company noted that the VIP business exhibited volume and win rate volatility over short periods of time. He also informed shareholders that the current quarter - the second quarter of fiscal 2019 - faced a very strong prior comparable period.

“The international business now has very big numbers to comp going forward, so that is probably the area where we have a bit of a watch. Right now we are happy with the start to the year,” he said.

The Star’s chief said in his address to shareholders at the AGM that The Star now had the largest VIP business in Australia and New Zealand and continued to see a positive impact from its diversification into new source markets, beyond China, for high-end customers.

Mr Bekier said The Star’s Sydney casino was the number one VIP destination in the region and its Gold Coast resort had overtaken Crown Resorts’ Perth property in the number three spot.