Woes at The Star: reduction in available cash amid legal disputes

The Star Entertainment Group has reported an AU$70m (US$43.56m) drop in cash reserves, citing tough trading conditions, legal fees, fines and capital expenditures.

Australia.- The Star Entertainment Group has announced its available cash as of December 31, 2024, plunged to AU$79m (US$49.16m). That’s a decrease of AU$70m (US$43.56m) from the previous report at the end of September 2024 when the company posted available cash was AU$149m (US$92.72m).

According to the company, the reduction in available cash reflects the continued difficult trading conditions the company has faced throughout 2024.

This includes essential capital expenditure and significant items including upfront fees relating to the establishment of a new facility agreement and the first AU$5m (US$3.11m) instalment of the AU$15m (US$9.33m) fine imposed by the New South Wales Independent Casino Commission (NICC) on October 17, 2024, following its consideration of the Bell Two Report.

The casino operator also cited “significant legal and consulting fees, ongoing transformation and remediation activities, and joint venture contributions” as a reason for the reduction in available cash.

See also: The Star Gold Coast licence suspension deferred

The Star said it continues to work towards the fulfilment of conditions that must be met to draw down the additional AU$100m (US$62.23m) of a new loan agreement.

The Star Entertainment Group posted revenue of AU$351m (US$230.85m) for the first quarter of the financial year 2024/25, down 18 per cent year-on-year and 11 per cent sequentially. Earnings before interest, taxes, depreciation and amortisation (EBITDA) were negative AU$18m (US$11.84m) compared to positive AU$23m (US$15.1m) in the previous quarter.

The company cited a “challenging operating environment and the continued implementation of mandatory carded play and cash limits”. It expects to release its half-year results for the period ended December 31, 2024, on February 28.

The Star Gold Coast licence suspension deferred

Last December, the Queensland Government announced a deferral of the suspension of The Star Gold Coast casino licence until March 31, 2025. In a statement, Deb Frecklington, attorney-general and minister for Justice and Minister for Integrity, said the change would allow the government to “seek answers on how the business is fixing a litany of problems”.

The delay will allow the government to evaluate the casino’s progress in implementing its remediation plan, which covers cultural reform, safer gambling, risk management, financial crime and governance. The Star’s compliance with these measures will undergo a formal assessment in February.

See also: The Star Entertainment Group: Steve McCann formally begins as CEO

Frecklington said: “The Crisafulli Government has the highest standards when it comes to the integrity of casino operations and, unlike our predecessors, we are committed to transparency and restoring the confidence of Queenslanders in the regulatory process.

“We will release the Special Manager report and the outcome of the assessment following the government’s March 2025 decision. This government has been clear in its expectations of The Star, and will not allow The Star Gold Coast to keep operating as a casino at the expense of integrity, our government’s high standards, and community safety.

“We recognise this may place pressure on The Star; however, the remediation actions must be its urgent priority. There should be no assumption that there will be any further deferrals granted to The Star and any failure to meet milestones may result in The Star Gold Coast casino licence being suspended.”

The Star Entertainment Group has reported an AU$70m (US$43.56m) drop in cash reserves, citing tough trading conditions, legal fees, fines and capital expenditures. Australia.- The Star Entertainment Group has announced…