Star confident of receiving insurance payout
Star Entertainment Group is seeking payment from an insurer following its shut down earlier this year.
Insurance News reports Star says the wording of its business interruption policy provides “reasonable” grounds for pursuing a disputed claim with its insurer over coverage for the shut down.
The casino operated halted its gaming activities in Sydney, the Gold Coast and Brisbane on March 23 as governments ordered shutdowns to control the COVID-19 outbreak.
Chief executive Matt Bekier told an earnings briefing last week that the company is still pursuing the matter against its insurers, after advising the market in April it had lodged a claim under its policy.
“This is obviously not a slam dunk, but we think we have a reasonable position,” he said.
“This is not a pandemic claim, because we have an insurance policy wording that creates very specific opportunities around the nature of the shutdown that was forced on us. So on that basis we think we have got a reasonable prospect.”
A filing with the courts has not been finalised, but the company is seeking declaratory relief, a spokesman said.
The Star did not provide further details of the insurance cover.
Mr Bekier said the company’s normalised earnings before interest, tax, depreciation and amortisation increased 12.1 per cent in the eight months to the end of February and growth had been accelerating.
By the end of the financial year, EBITDA was down 22.8 per cent to $430 million and the group reported a statutory net loss of $95 million.
Domestic high rollers the new focus for Gold Coast casino
Gold Coast casino bosses say they are focusing on luring domestic high rollers with Chinese ‘whales’ – the term used for rich gamblers – not expected back in Australia for another year.
The ABC said in July that The Star Gold Coast was busy when it reopened its doors last Friday with another influx expected this Friday when the Queensland border reopens to interstate visitors – with the exception of Victorians, who are dealing with an alarming spike in COVID-19 cases.
The Star’s group executive of operations, Geoff Hogg, said hundreds of hotel rooms were booked, restaurants were full, and he was expecting more visitors from Friday.
“It’s a good milestone with the border opening and hopefully getting more demand into the city,” Mr Hogg said.
“We had a couple of restaurants open and The Darling Hotel [during lockdowns], but now to be operating a lot closer to full capacity is fantastic.”
The senior executive of more than 20 years in the casino game said the continued closure of international borders would impact on the group’s bottom line.
“Our international guests make anywhere up to 10 to 12 per cent of our business,” he said.
“It’s millions of dollars in our earnings and that’s quite significant.
“We all understand that part of our market is not going to be there for a lengthy period of time.
“We know that international tourism is certainly not something that we can rely on for at least a year.”
When the international borders do reopen there is no guarantee Chinese tourists will return in the same number after China’s Ministry of Culture and Tourism issued an alert in June, reporting a “significant increase” in racist attacks on “Chinese and Asian people” due to COVID-19.
The warning came after China’s state-run tabloid Global Times published an editorial.
“The Ministry of Culture and Tourism reminds Chinese tourists to enhance their safety awareness and do not travel to Australia,” it said.
Tourism Research Australia said more than 1.3 million Chinese – excluding children – visited Australia in 2018 and spent $11.5 billion.
Mr Hogg said Chinese tourists were critical to Australia.
“Anything that holds that back is concerning,” he said.
“When international travel comes back you want all of those markets to be available.