Star posts loss after good start to fiscal year
Star Entertainment Group has posted a loss of A$94 million in the most recent financial year.
Calvin Ayre reports COVID-19 has spoiled what was shaping as a record year for the company.
Figures released last Thursday show Star Entertainment’s revenue came it at just under A$1.5 billion in the 12 months ending June 30, a 31 per cent decline from 2018-19.
Earnings fell by nearly half to A$282 million, while the company booked a net loss, compared to a net profit of A$148 million a year ago.
Australian casino companies report “normalised” results that cloud the inherent volatility in the VIP gambling sector.
Revenue was only down 21 per cent to A$1.8 billion according to this measure, while earnings dipped just 22 per cent to A$421 million.
Star’s chairman John O’Neill said the company had delivered record earnings from July 2019 to February 2020, after which Australia’s land-based gaming operators were shut down by COVID.
The company’s flagship eponymous casino in Sydney partially reopened in June before opening up fully in July, only to impose new restrictions a week later.
Overall VIP gambling revenue fell 51 per cent last year to A$285 million, of which the Sydney casino contributed A$262 million, despite the property enjoying a modest bump in its VIP win.
Overall domestic gaming revenue slid nearly one-quarter to A$1.45 billion, with Sydney contributing A$1.17 billion, a decrease of 25.4 per cent.
In Queensland, its Brisbane and Gold Coast casinos combined for revenue of A$579 million, a decrease of 38.8 per cent, nearly all of which came via domestic gaming, A$553 million.
Queensland VIP revenue tumbled 89.3 per cent to just A$24 million, due to a steep decline in turnover and a truly abysmal win rate of just 0.09 per cent.
The current fiscal year has been a mixed bag for The Star, after failing to secure a 30-year Gold Coast casino monopoly but receiving a monopoly to operate electronic gaming machines in Sydney.
From a public relations perspective, the casino operator has received fines for allowing guests to violate COVID-19 restriction and allowing one young guest to gamble.
Star Entertainment still works with junket operator
The Star Entertainment Group has told an official government inquiry it still works with controversial junket group Suncity.
World Casino Directory reported in early August that according to a recent report, the Brisbane-headquartered operator’s Chief Casino Officer Greg Hawkins is said to have confirmed the partnership.
The New South Wales government’s inquiry into Crown Resorts’ relationship with junket operators heard that Star Entertainment Group recently closed its private gaming room Suncity had run within its 351-room Sydney property.
Mr Hawkins explained his company took the decision after the junket’s owner, Alvin Chau, was barred by the Department of Home Affairs from entering Australia over suspcisions he has links with organised crim figures and may be a member of a notorious Macau group.
Mr Hawkins later divulged his firm had moved Suncity’s VIP gaming lounge to another area of its Sydney casino and tasked its own internal anti-money laundering compliance team to begin investigating the matter to see “if that brought any further information to light”.
The executive told the inquiry his company was in the midst of an “ongoing assessment” regarding this partnership but “has not yet made a final determination concerning the allegations against Chau.”
Junket firms such as Suncity Group assist wealthy Chinese patrons in travelling to overseas casinos so they can gamble using pre-arranged credit.
The report reveals the hearing previously heard how Crown Resorts had barred Suncity from operating its own cash exchange desk in 2018 after discovering $4 million in bills stored within the firm’s private room inside the Crown Melbourne casino.