Star Entertainment Group has requested a temporary suspension of trading of its common shares on the Australian Securities Exchange (ASX).
Casino operators are calling for an immediate suspension of trading on the ASX. Mr Starr said this related to communication from the New South Wales (NSW) Independent Casinos Commission today (February 19).
According to the Star, the communication refers to the commencement of an investigation under the New South Wales Casino Control Act 1992. The operator has not disclosed further information regarding this investigation.
However, it asked that the trading suspension remain in place until more details about the investigation are released or until February 21, whichever comes first.
Starr added that it expects its request to cease trading to be granted by the ASX.
Star agrees job guarantee agreement in New South Wales
The communication from the NSW Independent Casino Commission comes days after Starr signed a job guarantee agreement in the state. A binding agreement agreed last week requires Starr to maintain a minimum number of staff at its Sydney operations.
Under a similar agreement with NSW Treasurer Daniel Mookie, Star will begin a cashless and card play trial at its Sydney casino. This is a precursor to reforms planned for New South Wales later this year.
Last August, Star also secured concessions with New South Wales on casino tariffs. Since then, he has been working on a transition plan to stabilize Sydney casino operations and limit further cuts.
The Star is still working to rebuild its reputation in New South Wales. It was declared unfit to hold a casino license in the state in September 2022.
Adam Bell SC's report outlined anti-money laundering and social responsibility failures at The Star Sydney over the years. A year later, a progress report on the Star Sydney found that the casino had implemented 22 of the 30 recommendations in the Bell report.
Starr faces a similar suspension in Queensland, as well as four class action lawsuits and possible fines from AUSTRAC. Most of these are related to connections with Chinese junket operators.
Impact on financial performance
Unsurprisingly, regulatory actions have had an impact on Star's financial performance. In August last year, Star announced his full-year loss would be AU$2.4bn (£1.24bn/€1.46bn/US$1.57bn).
Starr noted that spending labeled “critical items” for the year was $2.8 billion. These were related to a series of fines faced by the operator.
Non-cash impairment charges of $2.2 billion were reported for goodwill and real estate assets in Sydney, Gold Coast and Treasury Brisbane. We also incurred regulatory and legal costs of $595 million, debt restructuring costs of $54 million, and headcount reduction costs of $16 million.
These costs, less the positive accretive EBITDA of A$317 million, result in an after-tax loss of A$2.4 billion.
