att Bekier, chief executive of Star Entertainment Group has said that the gambling giant plans to pivot towards premium gamblers away from its dependence on junket operators.
The announcement follows a scathing report into its rival Crown Resorts, which recommended banning junkets since they were found to be linked to Triads, the Australian Financial Review reports.
Bekier said Star would try to boost its appeal to international tourists, once the borders were opened, to develop a new market by stepping up its pitches to VIP gamblers in Asia through its offices in Singapore and Hong Kong.
The gaming giant was hit by border closures and lockdowns, and its net profit after tax dived 33.1 percent to $51 million on revenue that slumped 29.6 percent to $741.4 million.
But the result beat Citi analysts’ consensus, which pointed to strong cost management – operating costs were down 40 percent on the previous corresponding period and JobKeeper benefits normalized earnings before interest and after tax of $226 million.
The company did not qualify for the last tranche of JobKeeper because of its revenue performance. “Revenue has sufficiently recovered in Sydney that we didn’t reapply for the March quarter,” Mr Bekier said.
The group runs the Star in Sydney’s Pyrmont, the second-largest casino in Australia after Melbourne’s Crown Casino.
The gaming giant’s results come a week after the scathing report into Crown Resorts, which found its casinos facilitated money laundering and had been infiltrated by organized crime via its lucrative VIP international junket program.
Recommended ban on junkets
The Star management told investors it would engage with the regulator regarding the recommendations of the Bergin inquiry, the 18-month probe led by former NSW Supreme Court Judge Patricia Bergin, SC, which recommended a ban on junkets.
Mr Bekier said Star’s priorities for the year ahead involved two important modifications – COVID-19 is “forcing us to operate more conservatively and this will continue to happen as restrictions ease”. The second is the Bergin report, which “creates uncertainty” because no one knows when Star’s competitor can start operations in Sydney.
“In relation to the International VIP Rebate business, The Star is reviewing the business model, reducing the fixed cost base and will increase the focus on International Premium Mass customers when the borders re-open,” the company said.
The gaming giant put its results down to “extraordinary challenges and significant impacts of COVID-19”.
“The Group continued executing its growth strategy despite the extraordinary challenges and significant impacts of COVID-19,” said chairman John O’Neill.
He insisted that the fundamental earnings prospects for The Star’s domestic business remained unchanged because they were “underpinned by valuable long-term licences in compelling locations”.