Revenue falls 31% at The Star as Sydney restrictions, Brisbane sale delay impact earnings

Australia's Star Entertainment Group reported an A$27 million (US$ 17,400,420) EBITDA loss for the quarter ending June 30, as revenue declined to A$270 million (US$174,004,200), a 31% fall year-on-year from A$393 million.

While the figure represents a 1% increase from the previous quarter, the company remains impacted by lower returns from key properties in Sydney and the Gold Coast.

Revenue at The Star Sydney remained flat quarter-on-quarter at A$162 million (US$104,402,520) but was down 22% from the prior year. The Star Gold Coast posted A$96 million (US$61,868,160) in revenue, a 1% drop from the previous quarter and 6% lower year-on-year. No revenue was recorded from Treasury Brisbane, which ceased operations in August.

Regulatory measures affect Sydney operations

The decline at Star’s Sydney property was attributed to hotel performance and tighter regulatory measures. The implementation of mandatory identification checks and restrictions on cash transactions on gaming floors led to a 17% drop in average daily revenue compared to the period before restrictions began in late August.

Currently, customers can gamble up to A$5,000 (US$3,222) in cash per day at both Star Sydney and Crown Barangaroo. This limit is scheduled to decrease to A$1,000 (US$644) in August. Both operators have asked the New South Wales government to postpone the change, though no decision has been issued.

Queen’s Wharf sale faces setback

Star is also facing delays in its planned sale of a 50% stake in the Queen’s Wharf Brisbane development to Chow Tai Fook Enterprises and Far East Consortium. The two firms, which already own 25% each, are seeking to take over casino operations next year. Star has indicated the transaction is unlikely to be finalized by the July 31 deadline.

According to the Financial Review, failure to complete the deal could result in an additional A$36.5 million (US$23,522,790) in development costs for Star. The company may also be required to refinance a portion of the precinct’s debt, which could complicate approval of its full-year financial statements by August 28.

“The parties continue to negotiate long-form documents,” Star stated. “However, in The Star’s view, based on the current status of discussions, it is unlikely that the parties will be in a position to finalise long-form documents by 31 July 2025.”

Liquidity pressures and pending approvals

Star began the quarter with A$234 million (U$150,803,640) in cash but continues to rely on external capital to manage its obligations. A previously announced $300 million investment from Bally’s Corporation and the Mathieson family has only partially been delivered, with A$133 million (U$85,713,180) received to date. The remaining funds are pending probity clearance from New South Wales and Queensland regulators.

Star also faces a potential A$400 million (U$257,784,000) fine from financial crimes regulator AUSTRAC. The company has warned that the penalty could impact its solvency, and stated that its “ability to continue as a going concern remains dependent on several key matters.