This week's blindfold comes as the New South Wales casino regulator launched a second major investigation into Star's Sydney gaming operations on Monday morning.
Regulators are concerned that Star's remediation efforts may not get off the ground, having already ruled The Star unfit to hold a casino license in 2022 and appointed a manager to oversee The Star Sydney. Are concerned.
The company believes Starr's commitment to restoring stability and rebuilding trust (something CEO Robbie Cook and his team like to promise they do when speaking to investors) and the overall We want to test a cultural change.
So regulators on Monday morning launched a new 15-week investigation by Adam Bell, the same Sydney barrister who tore the company's credibility to shreds.
So when did Star find out about it? It was also Monday morning.
The Star has no knowledge of a major review by the same regulator that has made it clear that shareholders have the right to force a sale of the Sydney casino if it is deemed unfit to hold the licence. There wasn't. Starr may immediately suspend stock trading and leave the board of directors for two days.
How can I be so surprised by such an important review? And how can the regulators overseeing his two casinos in New South Wales keep that a secret?
Clearly, things are not looking good between the new and recuperating star and his key associates.
NSW Independent Casino Commission chairman Philip Crawford wants to take another look under the bonnet of The Star Sydney. Rhett Wyman
Regulators say it is important to carry out the review now. The manager has been appointed to oversee The Star Sydney until June 30 and needs to know whether the Star has learned the necessary lessons and implemented changes.
Starr was surprised, but even more shocking was that its investors weren't.
Investors have seen this before – just a year ago, then-NSW Treasurer Matt Kean withdrew a proposed tax increase out of nowhere. Starr was shocked and angry and ended up making a new deal with the new government, but this kind of surprise showed that Starr was quickly becoming a punching bag, and he was the biggest Makes you wonder how much social license they have left in the market. New South Wales.
Its credibility has already been lost in the investment market. The company ended last year with three times its shares outstanding after giving shareholders two stock bailouts, but the company still delivered nearly 20 cents per share to investors as in fiscal 2018 and 2019. It will take a long time.
The question is: What exactly does New South Wales's Independent Casino Commission, a zealous regulator, want?
A big challenge for CEOs
The terms of reference, announced on Monday morning, include Starr's risk management culture, financial stability, lines of control and reporting, and compliance with internal controls. It appears it wants to comb through Star's management team and weed out anyone who won't join the restoration effort.
One piece of good news for Starr and its Under the Gun management team and board is that the investigation hearings are scheduled to be held behind closed doors. If there is any painful impalement, it is done behind closed doors.
This will be a major test for CEO Cook, a former Tatsu Group and Tyro Payments executive who has had an eventful year and a half as casino owner. He has battled declining revenues, a softening economic environment, solvency threats (twice), and intense government and regulatory scrutiny that have made redress much more difficult than expected.
Mr. Cook responded by cutting costs, cutting jobs, raising equity twice, refinancing debt, and trying to mend relationships with stakeholders, but other problems continued to stumble.
He had to juggle regulatory oversight in New South Wales and Queensland, construction of a new casino in Brisbane, Star's revenue and financial position and tax issues in New South Wales.
Did he prioritize in the correct order? Mr. Bell's second investigation will find out.
This whole incident is yet another reminder that Star-style restoration and cleaning work is much easier to do on your own. Regulatory reviews, surprises and earnings downgrades are less important if you have private equity investments in a broader portfolio that are evaluated quarterly or semi-annually and do not require embarrassing trading suspensions. It seems that.
The issue is sure to fuel Star's upcoming meetings with investors and analysts, starting with the group's first-half results on Wednesday. It has been warned that more severe action could be taken after a license is suspended in New South Wales, including revocation or forced sale.
Star has not disclosed its fiscal 2024 revenue outlook, but it is not expected to be a cracker. Analysts expected revenue of $1.75 billion and EBITDA of $273 million for the year ended June 30, down from $1.87 billion and $317 million last year, S said. I predict that will happen.&P Global Markets Research consensus number.