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Star Entertainment in Disarray, Begs for Bailout
Posted on: September 4, 2024, 08:11h.
Last updated on: September 4, 2024, 09:52h.
Embattled Australian casino operator Star Entertainment is desperately seeking a short-term cash injection to stave off financial difficulties that are threatening the operation of its AU$3.6B Queen’s Wharf entertainment precinct in Brisbane, which opened only last week.
The company spent the weekend in talks with stakeholder groups, lenders, and regulators in an effort to raise funding – to no avail, reports the Australian Financial Review (AFR).
There are “genuine fears about the company’s ability to stay afloat,” according to AFR. The company reportedly needs AU$300M (US$201M) in short-term funding to keep Queen’s Wharf operational.
Star has asked the government of Queensland for tax relief, and those negotiations are ongoing. The New South Wales (NSW) government has already refused to offer any such bailout because it would be used to support the company’s Queen’s Wharf project in Queensland.
Suspended from ASX
The news comes a day after Star was suspended from the ASX for missing the deadline to file its full-year financial results.
On Friday, the company sought to halt the trading of its shares as it reeled from a damning report by NSW regulators who found it was still unsuitable to hold a gaming license for its flagship Star Sydney property.
The report by the New South Wales Independent Casino Commission (NICC) concluded the operator had failed to sufficiently address the “governance and cultural concerns” raised by a 2022 inquiry that found it unfit for licensing.
Criminal Gangs
Star’s Sydney license has been suspended since 2022 when the inquiry concluded it had allowed itself to be used by criminal gangs to launder money in private high-roller junket rooms.
The operator also permitted Chinese high rollers to withdraw a total of $900 million for gambling using China UnionPay (CUP) credit cards while disguising these transactions as “hotel expenses.” This was to avoid breaching CUP’s no-gambling transaction rules.
Despite the license suspension, gaming at the Star Sydney has remained operational. In a statement last week, the NICC said it was “contemplating [the new report’s] findings, including four compliance breaches,” adding that it would respond in due course.
Too Big to Fail
Queensland Premier Steven Miles said Wednesday his administration would do everything it could to keep Queens Wharf open.
This is a fantastic asset for our city. It is a big job generator. It is a major attraction to our city and state,” he said. “It is an important platform for Brisbane 2032 and everything that we’re going to do in our city over the next decade or so.”
Miles added that any bailout would still require Star to pay all of its taxes and license fees, but they would be deferred.
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