The Star Entertainment Group encountered significant financial setbacks in the initial six months of the year due to the global health crisis. They experienced a loss of A$65.6 million, which equates to approximately GBP 34.7 million, EUR 41.6 million, or USD 47.2 million. This downturn can be attributed to the enforced closure of their gaming establishments and the implementation of social distancing protocols. Their Sydney casino remained shut down from June to October, while their Queensland casinos also faced temporary closures. Furthermore, visitor numbers were significantly reduced due to border restrictions and other regulations. Although their Gold Coast casino performed relatively better after reopening their hotel, the overall financial impact remained substantial.
The Star Dream Group is grappling with regulatory hurdles, including claims that it disregarded a KPMG report concerning anti-money laundering infractions. Star Dream initially labeled media reports on the matter as “deceptive” and subsequently provided a more comprehensive response, affirming its commitment to enhancing its anti-money laundering compliance.
Last month, Australia’s Transaction Reports and Analysis Centre (Austrac) declared it would broaden its inquiry into Star’s Sydney financial transgressions to evaluate other entities within the group.
Additionally, in the first half of the year, Star Dream disclosed that it had withdrawn a tentative proposal to merge with its competitor, Crown Resorts, in May of the previous year, which would have resulted in a combined operation valued at approximately A$12 billion. The company cited concerns regarding the ongoing regulatory process at Crown Resorts in Victoria.
Shifting focus to expenditures, while government levies and taxes declined by 20.8% to A$145.8 million, other expenses escalated. Personnel costs surged by 26.3% to A$277.4 million, the cost of goods sold increased slightly by 5.9% to A$28.6 million, advertising and promotional expenses rose by 5.9% to A$24.9 million, and other expenses climbed by 28.1% to A$56.6 million.
This resulted in a pre-tax loss of A$103.9 million, encompassing A$25 million in finance costs, compared to a profit of A$73.7 million during the corresponding period of the 2020-21 fiscal year. Earnings before interest, taxes, depreciation, and amortization (EBITDA) also plummeted by 86.8% to A$30.7 million.
Star Dream did receive A$29.
In the last half-year, tax reductions valued at A$7 million aided in mitigating the effects of shutdowns and other limitations. However, operators still experienced a net deficit of A$74.2 million during this timeframe, in contrast to a profit of A$49.7 million in the corresponding period of the previous year.
Star Entertainment also unveiled modified outcomes to mirror the fundamental performance of their operations. They removed the inherent unpredictability of their global VIP rebate business. These results were modified based on an average win rate of 1.35% on actual transactions, levies, and revenue-sharing commissions, excluding significant ventures.
Adjusted total earnings decreased by 21.5% to A$575.8 million, EBITDA declined by 87.0% to A$29.4 million, and net loss reached A$73.7 million.
Sign up for the iGaming newsletter.
