Star Entertainment records $198.6M loss as Covid closures hit casinos

Star Entertainment records $198.6M loss as Covid closures hit casinos

by Pranali Mehta

Star Entertainment Group, Australia’s second-largest gambling company, has reportedly posted a $198.6 million loss for the fiscal year because of Covid-related closures as well as a write-down against its flagship casino, based in Sydney.

According to the second-largest casino operator in Australia, the value of goodwill for the Star Sydney casino has been reduced by $162.5 million because of regulatory and other concerns.

Following the allegations that the company permitted alleged money laundering, foreign interference, fraud, and organized crime at its Sydney casino, the troubled firm is awaiting the results for a review into its eligibility to retain an NSW casino license along with an inquiry from the financial crimes regulator.

Notably, the gambling company now faced a different investigation in Queensland.

Star reported a normalized net loss of $32 million excluding major items, while revenue for the fiscal year that ended 30 June fell 1.2% to $1.53 billion.

Although the firm's interim chairman, Ben Heap, noted that Covid-19-related setbacks and regulatory investigations have caused major obstacles, claiming that the company's core strength has enabled a significant turnaround.

The casino's main Sydney location was shut down for 102 days due to operational constraints brought on by the pandemic, posing a considerable negative impact on revenue.

Star also faces strong competition from Crown, which opened its Sydney casino earlier this month after getting approval from the New South Wales regulator.

Star noted that earnings were high in its Brisbane and Gold Coast properties, where Covid-related restrictions had a far more subdued impact.

The company stated that it had seen the favorable revenue patterns from the Q4 of the fiscal year 2022 had carried over into the current fiscal year.

Domestic revenue for the timeframe from 1 July to 18 August, is up 9% from the corresponding pre-Covid period in 2019, mostly due to a 26% increase in domestic revenue on the Gold Coast.

Star Sydney's domestic earnings are similar to those from before Covid.

For the fiscal year, Star would not pay any dividends.

Source credit: https://www.theguardian.com/australia-news/2022/aug/22/star-entertainment-group-casino-operator-loss-covid-closures

Pranali Mehta

A chemical engineer by qualification, Pranali Mehta dutifully walked down the slated path and worked in a chemical firm for a year. Her passion for writing however, pushed her into experimenting with the same as a career. With over three years of experience in content writ Read more...