Star Entertainment confirms near-insolvency before Bally’s US$100 million bailout
The Star Entertainment Group has revealed it was close to running out of cash before receiving a US$100 million injection from United States-based casino operator Bally’s Corporation last week.
Despite the lifeline, Star’s operations remain under significant pressure, with revenue continuing to decline across its Sydney, Gold Coast and Brisbane properties in the March quarter. The company cited the introduction of regulatory reforms as a key factor affecting its competitiveness—particularly in New South Wales, where casinos are subject to stricter controls than pubs and clubs.
Revenue for the December half fell by more than A$200 million to A$650 million compared to the prior corresponding period. The March quarter results further highlighted Star’s declining market share, with pubs and clubs benefitting from their exemption from mandatory card-based gambling systems and identification checks.
Star attributed a 25% revenue drop in the December half-year to “challenging trading conditions due to the implementation of casino operating reforms [including mandatory carded play and cash limits which were implemented at The Star Sydney last year] and further loss of market share”.
It added that this had created “an uneven competitive environment with pubs and clubs, which continues to negatively impact on operating performance”.
Although Queensland has not yet introduced carded play, other measures such as know-your-customer requirements are already in place.
Chief executive officer Steve McCann acknowledged the toll on customer numbers: “Clearly our performance continues to be very challenged as we navigate to a very difficult trading environment,” he said.
“The ongoing impact of regulatory reforms, the impact of mandatory carded play, cash limits, time limits, and our loss of market share across the Sydney and Gold Coast properties has had a material impact on the business, and we are continuing to operate through very challenging conditions.”
McCann said the broader rise in poker machine revenue across New South Wales and Queensland pointed to Star’s market share having “materially declined”.
While this suggested that a level regulatory playing field could benefit Star, he cautioned that implementing such reforms sector-wide may take years.
The company also noted seasonal impacts and weather-related disruptions, including a temporary closure at its Gold Coast venue due to Cyclone Alfred.
Star disclosed the extent of its financial distress in its long-delayed December half-year accounts, which the board had been unable to approve earlier due to going concern risks.
The company posted a net loss of A$302 million for the period, including A$166 million in significant items such as a writedown of its Brisbane casino, which is being sold to consortium partners.
As of 11 April, Star had only A$98 million in cash despite the recent capital injection. Without the US$100 million from Bally’s received on 9 April, the company would have exhausted its funds.
Star also disclosed ongoing negotiations with Bally’s and hospitality magnate Bruce Mathieson regarding a broader A$300 million rescue arrangement.
Star’s shares, which have been suspended since 28 February at 11 cents, are set to resume trading on Wednesday.
Jonathan Jackson, 16th April 2025
