Star’s insurance claim turned down by court

One of Australia’s premier casino operators has had a court rule against its COVID-19 insurance claim.

Legal Gambling and the Law reports that Star Entertainment decided to put in an insurance claim with Chubb Insurance Australia and other insurers on the basis that its financial losses due to COVID-19 should be covered by its business interruption policy.

However, the insurance companies were not willing to pay Star Entertainment as they deemed a government sanctioned lockdown did not cover the terms and conditions of the policy.

Star, which runs casino resorts in Brisbane, Sydney and the Gold Coast, decided to go to the courts to see if they would force the insurance companies to pay up.

Star had a $1.75 billion policy for its casino in the Gold Coast, a $1.43 billion dollar policy for its casino in Brisbane and a $4 billion policy for its casino in Sydney.

Macquarie analysts predicted when the lawsuit was filed that it would be very difficult for Star Entertainment to get a positive ruling from the courts.

Star wasn’t the only casino operator to file such a claim as there were also casino operators in America who were filing insurance claims asking for reimbursement based on the business interruption policy.

Chief Justice Allsop ruled against Star Entertainment and said that after going through the operator’s special risk policy there was nothing there to cover financial losses from a government shutdown.

The Chief Justice also instructed Star Entertainment to submit further claims within a 14 day period regarding the spoilage of goods.

Star Entertainment released a statement and acknowledged the ruling of Chief Justice Allsop.

The operator has up to 28 days to file an appeal and Star Entertainment is considering the possibility of lodging an appeal.

For now, they will be analysing the judgement and then discuss whether they should accept the ruling or more forward with an appeal.

We should know more about this in the next couple of weeks.

In July, Star withdrew a merger bid to join forces with rival Crown Resorts.

Star withdrew from merger deal with Crown

The potential merger would have created the biggest casino operator in Australia, with an estimated value of more than $12 billion.

“We continue to believe substantial benefits could be unlocked by a merger, however the uncertainty surrounding Crown is such that The Star is unable to continue at the present time with its proposal in the form as announced,” the company said in a release to the ASX.

The Star has left the door open to an alternative proposal with Crown, depending on the outcomes of the royal commissions, which could see Crown lose its licences, or face restrictions that would potentially decrease the benefits of a merger if Crown Melbourne is forced to operate separately of the Crown Resorts group.

“The Star remains open to exploring potential value enhancing opportunities with Crown,” it said.

“The Star will continue to closely monitor the Victorian royal commission and Perth royal commission, with final findings expected later this year.”

Crown issued a statement acknowledging the withdrawal of The Star’s offer, saying it remains committed to maximising value for its shareholders.

“Crown remains willing to engage with The Star in relation to a potential merger on terms acceptable to both Crown and The Star.”