Star’s court hearing against insurer adjourned
Australia’s Federal Court has adjourned a hearing into a lawsuit launched by The Star Entertainment Group.
Insurance News reports Star’s hearing against Chubb and other insurers has been adjourned until September 25.
Chief Justice James Allsop issued an order requiring Chubb and the other insurer respondents to file a concise statement by September 22 outlining the basis for the denial of claim.
The listed casino group and its subsidiaries launched the legal proceedings last month against the insurers after its business interruption claim, made under its industrial special risks policy, was declined.
Chubb is the lead insurer, with insurers named as respondents in the lawsuit are AIG, Allianz, Allied World Insurance, Assicurazioni Generali, HDI Global, Liberty Mutual, Picc Property and Casualty Company, Swiss Re International, XL Insurance and Zurich.
Chief Justice Allsop wants the insurers to also state the most efficient way they think the dispute can be resolved and further matters that the casino operator may need to identify or amend.
He also wants the statement to include any anticipated questions of construction that may arise to assist resolution of the matter.
The Star Entertainment Group says the insurers’ reasons for declining its claim, including grounds that the cover did not cover non-physical losses, were in breach of the policy.
It says in its concise statement lodged with the court that the policy insures its businesses and subsidiaries against certain special risks, including “certain risks of business interruption” and that its BI claim falls within the terms described in the cover.
But the insurers had told the casino operator the Civil Authority Extension in the policy refers to “loss” as a “physical loss” and that COVID-19 does not meet the “other catastrophe” terms contained in the policy.
Star aware VIP business return will be slow
Star Entertainment is aware that international VIP business at its casinos will require even more time to fully recover.
Tunf reported in August that Star chief executive Matt Bekier stated this business “is stolen” and may need another year.
For this reason, the company decided to sell one of its private jets and abandon its “VIP motor yacht” for now.
The company is handling only five per cent of normal VIP volume, Mr Bekier said, who explained some of the casino’s former clients “just don’t feel comfortable coming back to private places.”
However, he said that those who return now are “spending more”.
The Sydney casino is currently operating at full capacity but with some restrictions, which “bodes well that restrictions have been eased,” Mr Bekier added.
The Australian casino operator reported bumper losses due to the closure of gambling venues to prevent the spread of COVID-19.
Its results released this week showed revenue of around A$1.5 billion for the fiscal year ending June 30, a 31 per cent drop compared to the same period a year ago.
In all, a loss of A$94 million was reported by Star.
Australian casinos report “normalised” results, where there appeared to be no variation from VIP gambling, with reported revenue only declining 21 per cent to A$1.8 billion.
Star’s managing director John O’Neill said the company made record profits during the period of July 2019 to February 2020.
The company’s balance sheet shows the overall VIP gaming revenue fell 51 per cent in 2019 to A$285 million.
The Sydney property’s contribution was A$262 million, despite the casino getting a slight win in its VIP win.
The Star failed to achieve a 30-year monopoly on the Gold Coast, but it has control of gaming machines in Sydney for the same period.