Star Entertainment’s Financial Woes Deepen
Star Entertainment, the Australian casino operator, has reported a significant decline in its cash reserves, which stood at AU$79 million (£40 million) at the end of 2024. The figure includes AU$100 million from its recently secured debt facility, drawn on 3 December. This marks a AU$107 million reduction in the company’s available cash over the last quarter of 2024.
The financial decline has been attributed to multiple factors, including challenging market conditions, substantial legal and consultancy expenses, and payments linked to its Queen’s Wharf joint venture. Additionally, Star has begun addressing a AU$15 million fine from New South Wales (NSW) regulators, paying an initial AU$5 million instalment.
While an additional AU$100 million tranche from the debt facility remains available, the company acknowledged that meeting the conditions to access these funds will be “challenging” given its current circumstances.
Increased Shareholder Investments
Despite Star’s struggles, recent filings suggest renewed interest from key investors. On 14 January, two shareholders announced increased stakes in the company:
- JPMorgan Chase & Co.: The global financial institution now holds 182 million shares, equating to a 6.3% stake, up from 5% earlier this month.
- Xingchun Wang: The businessman raised his stake from 5.5% to 6.5% (approximately 187 million shares), becoming Star’s second-largest shareholder after Chow Tai Fook, which holds 9.6%.
Wang’s ties to the gaming sector remain unclear, but reports suggest potential connections to Macau.
Regulatory Challenges Ahead
Star’s future hinges on its ongoing remediation efforts following the Bell Two inquiry and subsequent regulatory fines. The NSW Independent Casino Commission is set to reassess Star’s casino licence in March 2025. A potential revocation would exacerbate the company’s financial difficulties.
Melbourne-based consultant Peter Cohen warned that Star could be approaching a financial “death zone,” raising questions about its long-term viability. He also noted that government intervention to bail out gaming companies is typically unpopular, further limiting Star’s options for recovery.
