New South Wales (NSW) and Queensland regulators appointed special managers to oversee the company’s operations after the scandals surrounding its risk management failures and unethical behaviors. The beleaguered operator has recorded substantial progress in remedying its deficiencies but must still convince authorities it is ready to resume control.
Both Regions Expect Swift Progress
In ASX filings on Friday, Star disclosed the extension of Nicholas Weeks’ term as Manager of The Star Sydney by nearly six months, lasting until 30 June 2024. Similar to NSW, the position of the Special Manager for The Star Gold Coast and Treasury Brisbane casinos in Queensland has been extended by 12 months to 8 December 2024.
These extensions aim to demonstrate that Star is capable of the necessary remedial actions to regain suitability and resume gaming activities as per its casino license provisions in NSW and Queensland. This change necessitates Star to demonstrate its adherence to the ongoing remediation plans and regain suitability by summer 2024.
Queensland’s decision to extend its special management follows a recent decision by Attorney General Yvette D’Ath to alter the effective date of a 90-day casino license suspension from 1 December 2023 to 31 May 2024. Meanwhile, the NSW Independent Casino Commission (NICC) clarified that its extension will likely mark the final continuation of the Manager’s term, with the option to conclude the tenure earlier if deemed appropriate.
The Operator Faces Growing Pressures
Star Entertainment managing director and CEO Robbie Cooke commented on the recent developments, expressing satisfaction with the Remediation Plan’s approval in Queensland. He stressed the need for unwavering commitment, accountability, and diligence to implement the measures successfully and prove that Star Entertainment can operate without additional supervision.
Despite the operator’s steady progress towards compliance, it faces substantial financial issues. Recent casino duty rate increases threaten to undermine the company’s long road to profitability as its FY 2022/23 results reported an unpleasant full-year loss of $1.6 million. However, all revenue-related policies must wait until the company regains regulatory compliance.
We need to regain the trust and confidence of all our stakeholders and communities and continue to have an unwavering focus on transformation.
Robbie Cooke, Star Entertainment managing director
While Star Entertainment has recorded steady progress with its remedial measures, many industry experts express skepticism about whether the operator can salvage its influence and reputation. Even if the company regains the trust of regulators, it must still struggle with mounting losses and macroeconomic pressures, meaning a return to profitability may take years.
Deyan Dimitrov
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