Star Sydney Reports Drop in Revenue Owing to Competition and Regulatory Challenges

Summary

• Star Entertainment said revenue at its Sydney property declined by 11%
• Star Sydney’s casino license was suspended indefinitely in the wake of the Bell Review
• The property faces new competition in Crown’s Barangaroo casino

After being found unsuitable to hold a license in New South Wales, Star Entertainment reported a decline in revenue at its Sydney casino. This came as a direct result of compliance changes and competition impacts, according to the casino operator’s newly-appointed CEO and managing director Robert Cooke.

Star Sydney Revenue Down 11%

During its recent annual general meeting, Star revealed that revenue at its Sydney venue dropped by 11% from 2019 levels. The latest figures cover the period from July 1 to November 15, 2022.

The compliance changes mentioned by Cooke relate to the findings of an inquiry into Star Sydney’s suitability to hold a license. The inquiry, launched in September 2021, was led by senior counsel Adam Bell. It unveiled damning details of Star’s regulatory breaches, including concealing $900 million of Chinese debit card transactions, committing serious anti-money laundering (AML) failings, and having links with junket operators with criminal backgrounds.

The Bell Review concluded in September 2022 and ultimately found Star unfit to hold its Sydney license. A month later, Star’s Sydney casino license was suspended indefinitely, with the group slapped with a massive $100 million fine.

Star suffered a significant drop in value so far this year owing to its regulatory troubles. The New South Wales Independent Casino Commission (NICC) appointed Nicholas Weeks as the new manager of Star Sydney and the casino is required to comply with his orders.

The ongoing regulatory troubles are not the only challenge the group has to deal with as its Sydney property also faces new competition with the opening of Crown’s Barangaroo casino in August. Cooke told shareholders it’s part of the “normal competition” and that Star would work hard to retain its customers.

Crown itself was found unsuitable to hold a license in all three states where it runs casinos though it had been allowed to continue to operate under stricter rules. The casino giant was recently acquired by Blackstone for AU$8.87 billion (US$6.3 billion).

Star’s Overall Domestic Revenue Up 1%

While Star Sydney’s revenue dropped, its counterparts in Queensland performed well, with revenue at Star Gold Coast and Treasury Brisbane increasing by 32% and 9% respectively. Positive results at Star’s Queensland properties made up for the losses incurred by its Sydney casino, leading to a 1% rise in the group’s overall domestic revenue.