Inside Star CEO Robbie Cooke’s high-stakes game of whack a mole

Star Entertainment chief executive Robbie Cooke has called off a strategic review that could have resulted in the sale of the company’s flagship Sydney casino.

There is a sense of optimism that the worst of Star’s troubles are behind it – and the market agrees to a certain extent, with the company’s share price rebounding 2.1 per cent to 96.5c on Tuesday, valuing the group at $1.56bn, from Monday’s all-time low.

But Cooke isn’t about to pop the champagne. Since starting at Star in mid-October, the former Tyro Payments boss has been playing a game: let’s call it Pyrmont whack a mole. As soon as he solves one problem, another emerges.

Take for example the company’s “transformational” $2.9bn Queens Wharf development in Brisbane. It is finally set to open next April after being hit with construction delays. But last week its builder, Brookfield-owned Multiplex, whacked Star with a Supreme Court lawsuit over cost blowouts.

One step forward, half a step backwards. Then there is the clean-up bill totalling $595m last financial year and counting, from bombshell royal commission-style inquiries in NSW and Queensland, that has left it fighting its casino licences.

Its lucrative international business has also ground to a halt. Firstly from border closures, then a suspension of its VIP rebate play after it became the epicentre of revelations the company facilitated money laundering.

Now China’s economy is slowing, limiting the uplift expected from the return of international tourists after three pandemic-plagued years.

It is almost unthinkable that Star – which posted a $2.4bn statutory annual loss on Tuesday – launched a bold plan to merge with bigger rival Crown just over two years ago.

Unthinkable because earlier this year, Cooke engaged Barrenjoey to assist in a strategic review of the future of Star Sydney. All options were on the table after the company said its viability was at risk from former NSW treasurer Matt Kean’s proposed casino tax increases.

One of these options was a sale, or partial sale, of its Pyrmont casino. Thankfully, for Star, the Minns Labor government, which was elected in March, has removed the need for such drastic action, delaying the tax rises until 2030 – and even then, Star has a right to seek a review if its earnings are still anaemic.

While this means Star doesn’t have to contemplate tapping any real estate agents or selling its furniture, Cooke is not done looking over his shoulder.

“There are a lot of moving parts to the business, to be sure,” Cooke says.

“And it’s very much just going through each issue, working through it, trying to find a resolution and then working through it. It’s issues rich, is how I describe it. We still have a lot of work to do.”

Encouragingly, Star’s underlying business has returned to growth. Its normalised net profit surged 230 per cent to $41.3m, beating consensus estimates for $17.4m.

“I wouldn’t want to overstate things,” Cooke says.

“The big focus of the business is the remediation and that is a large work stream, and it’s critical for us to regain our social licence. That is a two to three year journey.

“But I’m getting to the point where I’m feeling that the business has stabilised.

“The first quarter of FY24 sort of gave me that confidence. We have been working hard to address the issues that needed to be dealt with in the business and there was an uplift in our AML (anti-money laundering) capability and uplift in our safer gambling, which is still a work in progress.”