The publication reported a net income of $419.2 million Australian dollars (€255 million/$271.5 million) in its third-quarter business update for the period ending March 31. This represents a small drop of 4.6% compared to the third quarter of 2023.
The company has not yet released its full third-quarter financial results, but has provided some information about key aspects of its operations.
The company’s third quarter has been eventful. In February, the Independent Liquor & Gaming Authority of New South Wales confirmed that it would conduct a second round of investigations into the company, a follow-up to the well-known Bell Report. The investigation, known as “Bell Two,” began on February 19 and will continue until May 31.
On the day the second round of investigations was announced, the company requested a trading halt on its ordinary shares on the Australian Securities Exchange.
The initial Bell Report revealed significant anti-money laundering and social responsibility deficiencies at the company’s Sydney location, and suggested 30 measures to improve practices. A year after the initial report was released, a report indicated that the company had implemented 22 of the 30 recommendations.
The second round of investigations will concentrate on the company’s culture, as well as analyzing the impact of the first Bell Report.
What is included in the business update?
The Star Entertainment Group encountered a decline in high-roller gaming room income during the most recent quarter compared to the same period last year. This presented a significant challenge, with high-roller gaming room income decreasing by nearly 20% at The Star Sydney and Gold Coast, and even more substantially at Treasury Brisbane.
However, the primary gaming areas performed well. The Star Sydney witnessed a slight increase, while The Star Gold Coast and Treasury Brisbane experienced even larger gains. Despite this positive trend, the decrease in high-roller gaming room income resulted in an overall revenue reduction of nearly 5%.
Gaming tax revenue experienced a slight dip but remained at a satisfactory level. January emerged as the most lucrative month for tax revenue, as well as for overall income.
March proved to be the most costly month, but overall operational expenses saw a modest increase. The Star attributed this rise to increased investment in their risk, control, and transformation teams.
Earnings before interest and taxes experienced a substantial decline, but standardized earnings before interest and taxes exhibited a much more favorable performance.
Following certain adjustments, the company incurred a minor loss, a significant improvement compared to the substantial loss incurred in the previous year.
Star Entertainment is going through a rough patch.
After the debut of their satellite, Bell Two, in March, the company’s chief executive, Robbie Cooke, and chief financial officer, Christina Katsibouba, stepped down. David Foster, the head of the board, was named temporary leader, while the hunt for a new CEO continues.
Star has had trouble finding a permanent leader. Cooke took on the role in November 2022, making him the company’s fourth CEO in a single year. He replaced Matt Bekier, John O’Neill, and Geoff Hogg.
Bekier left his position in June 2021 during an investigation into The Star Sydney.
In recent years, Star has faced a number of regulatory hurdles. In October 2022, they were deemed “not suitable” to hold a license in Queensland. As a result, their license in the state was put on hold, and they were told to pay a penalty of A$100 million. Star’s New South Wales license was also put on hold indefinitely in October 2022. Additionally, they were told to pay a penalty of A$100 million.
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