The Star Entertainment Group Ltd has posted a net loss of A$302 million for the December 2024 half-year, underscoring the extent of financial strain that nearly pushed the casino operator to insolvency. The result included A$166 million in significant items, notably a writedown of its Brisbane casino, which is being divested to consortium partners.
The release of the accounts had been delayed amid concerns around Star’s ability to continue as a going concern. That uncertainty was only addressed after a last-minute US$100 million cash injection from United States casino group Bally’s Corporation on April 9.
Without the funds, Star would have exhausted its remaining cash, which stood at just A$98 million as of April 11. The capital forms part of a broader A$300 million rescue package under negotiation with Bally’s and Australian hospitality investor Bruce Mathieson.
Under pressure
Despite the bailout, Star’s operations remain under pressure. Revenue for the half-year fell by more than A$200 million to A$650 million compared to the prior corresponding period. The company attributed a 25% revenue decline to “challenging trading conditions due to the implementation of casino operating reforms [including mandatory carded play and cash limits which were implemented at The Star Sydney last year] and further loss of market share”.
Star said this had contributed to “an uneven competitive environment with pubs and clubs, which continues to negatively impact on operating performance”.
The March quarter confirmed that market share losses had continued, particularly in Sydney where regulatory obligations have driven customers toward venues not subject to the same requirements.
Chief executive officer Steve McCann said: “Clearly our performance continues to be very challenged as we navigate to a very difficult trading environment.
“The ongoing impact of regulatory reforms, the impact of mandatory carded play, cash limits, time limits, and our loss of market share across the Sydney and Gold Coast properties has had a material impact on the business, and we are continuing to operate through very challenging conditions.”
McCann said that despite overall growth in poker machine revenue across New South Wales and Queensland, Star’s share had “materially declined”, suggesting its issues stem from competitive disadvantage rather than industry contraction.
Seasonal factors and the temporary closure of its Gold Coast casino due to Cyclone Alfred also contributed to the revenue downturn.
Shares in Star, which have been suspended since February 28 at 11 cents, resumed trading today. The group is currently up 4.5% intraday.