Star posts $74m half year loss
Australia’s Star Entertainment Group has posted a $74 million loss in the six months to 31 December, heavily impacted by casino closures and capacity restrictions due to COVID-19.
Inside Asian Gaming reports that with the group’s flagship Sydney casino shut from the start of the Australian financial year until 11 October, group-wide gross revenue fell 29 per cent year-on-year to A$581 million, while earnings before interest, tax, depreciation and amortisation declined 87 per cent to A$31 million.
The result included an 89 per cent decline in VIP gaming to just A$1.8 million, while domestic gaming revenue fell 24.3 per cent to A$498 million.
Non-gaming revenue increased slightly to A$8.5 million.
In Sydney, the lengthy closure resulted in a 39.5 per cent fall in total gross revenue to A$240.3 million and an EBITDA loss of A$24 million although Star said revenue was up 29 per cent year-on-year in the period after reopening.
Star Gold Coast sees revenue increase
The Star Gold Coast saw revenue rise 5.1 per cent year-on-year to A$180.4 million, although EBITDA fell 50.6 per cent to A$25.8 million, while Treasury Brisbane saw gross revenue decline 11.1 per cent to A$160.6 million.
“The Group continued executing its strategy well in the context of the extraordinary COVID-19 related challenges,” Chairman John O’Neill said.
“The fundamental earnings prospects for The Star’s domestic business remain attractive.
“They are underpinned by valuable long-term licences in compelling locations while the transformation of our properties into globally competitive integrated resorts is nearing completion.”
Star said it had not declared an interim dividend for the first half.
The company noted that the first two months of 2022 has seen continued impact by COVID-19 and the Omicron variant, having a material impact on visitation and supply of product and services.
This peaked in mid-January but has progressively eased since then.
Between January 1 and February 13, group revenue is up seven per cent compared to the prior-year period, driven by a 17 per cent uptick in gaming revenue in Sydney.
Giving a property opening update, The Star managing director and chief executive officer Matt Bekier said the Queens Wharf Brisbane is anticipated to open progressively from mid-2023, with 64 per cent of the gross floor area now built out and the fit-out of the gaming floor progressing.
Bekier also noted the opening of the Dorsett Gold Coast Hotel in December 2021, and The Star Residences, which is scheduled to open in the four quarter of FY22.
Star alleged to have encouraged gamblers to falsely claim they live interstate
Australian casino operator Star Entertainment is alleged to have encouraged local high rollers to falsely claim they lived outside of New South Wales, as part of a scheme that minimised the amount of gaming tax the casino paid the state government.
Two insiders who worked at The Star Sydney casino have confirmed their direct involvement in a practice that encouraged big local punters to obtain documentation to make it appear they resided overseas or interstate, even though they lived in NSW.
The players were told if they could meet the checklist of requirements to apply for non-NSW gaming status, such as current interstate driver’s licence or recent passport visa stamps, they could gain access to lucrative rebate programs.
The program involved The Star paying high rollers a small cut of their gambling turnover.
The effect of the practice was that The Star Sydney may have paid millions of dollars less in gaming revenue to the NSW government.
Under a deal struck with the NSW government, The Star Sydney pays a discounted tax rate of about 10 per cent on revenue it generates from non-local VIP gamblers who are part of these rebate programs.
Revenue generated by local players at The Star is taxed at more than double the discounted rate.
