Uncertain Future for The Star Entertainment Group Limited

The Star Entertainment Group's future hangs in the balance amid trading halts and mounting regulatory scrutiny. (Image: Martin Berry / Alamy)

The future of The Star Entertainment Group Limited looks uncertain after the Australian casino operator was suspended from publicly trading its shares on the Sydney Stock Exchange.

The Brisbane-headquartered firm is responsible for the country’s gambling-friendly The Star Sydney and The Star Gold Coast facilities and recently closed its Treasury Brisbane enterprise so as to transfer this 29-year-old facility’s casino license to its new The Star Brisbane venue. 

Confusing Conditions

In an official filing, The Star Entertainment Group Limited declared it had requested a halt to trading on Friday and planned to return to ‘normal’ business on September 2. This followed the publication of a damning report from the New South Wales Independent Casino Commission (NICC), in which the operator was again found to be unsuitable to hold a local casino license.

However, the return to trading has yet to materialize, with The Star Entertainment Group Limited having now been temporarily suspended from the Sydney bourse as a result of its failure to lodge ‘the relevant periodic report by the due date’. The company went on to assert it intends to publish its full-year results soon and is ‘considering the implications’ the NICC report ‘may have for disclosures concerning its financial results for the year ended June 30’.

Critical Conclusions 

The Star Entertainment Group Limited was left reeling in 2022 when an initial NICC investigation led by local lawyer Adam Bell uncovered significant shortcomings in its cultural, communications, and anti-money laundering processes. 

Nevertheless, the operator was controversially allowed to keep its New South Wales casino license under a conditional suspension so long as it agreed to pay a record fine of just over $65 million and clean up its act via the completion of a remediation plan under the supervision of independent manager Nicholas Weeks. 

Serious Situation 

The Chief Commissioner for the NICC, Philip Crawford, responded to the findings of the most recent inquiry into The Star Entertainment Group Limited by describing the operator as having ‘not moved quickly enough to address the governance and cultural concerns raised in the first Bell report’. The regulator also proclaimed his organization is to now consider the conclusions of the fresh probe, which encompass four compliance breaches, before responding ‘in due course’.

“The Bell report underscores the NICC’s concerns that it was not receiving all of the facts from The Star Entertainment Group Limited at a time when we needed certainty the company could fund and prioritize an urgent business turnaround,” Crawford said. 

“The NICC is responsible for regulating an industry that is highly vulnerable to criminal infiltration and we are tasked with setting regulatory standards that meet the community’s expectations. It was unclear whether The Star Sydney could feasibly operate under less supervision when it was exhibiting past behaviors with its licence still suspended.”

Dangerous Dilemma 

It currently remains unclear as to whether The Star Entertainment Group Limited, which had been Australia’s largest publicly-listed casino operator, will return to trading or proceed with a major cost-cutting program due to encompass an asset write-down of around $950.9 million. 

The operator had been seeking tax relief and financial assistance to trade through the next six months but has now been placed in a perilous position after being forced to suspend The Star Sydney’s gambling operations.

Industry analysts had earlier predicted The Star Entertainment Group Limited would report a drop of at least 11.5% year-on-year in its aggregated revenues for the twelve months to the end of June to something like $1.1 billion. This decrease was widely forecast to be joined by an analogous dip in total earnings of up to 48%, while helpful deals with any lenders, investors, or government agencies remain elusive.