Australian gaming operator The Star Entertainment has acknowledged that liquidity and financial viability remain the most pressing concerns for management amid ongoing regulatory challenges.
In a speech at its Annual General Meeting (AGM), The Star’s chairman, Anne Ward, stated, “Near-term liquidity challenges and the broader financial viability of the business will remain the largest concerns for the Board and executive team as they work to stabilize the business and advance the remediation program toward achieving suitability.
“Agreeing with corporate lenders on a revised lending package has provided some space to address the immediate liquidity situation, but there is still more to be done, as outlined in our recent market disclosures. This work will continue in earnest throughout 2025.”
This statement was disclosed in a filing to the Australian Stock Exchange (ASX) on Thursday, following the company’s AGM.
The Star Entertainment also announced that it had finalized a AU$200 million ($130.3 million) debt facility.
The company’s financial difficulties stem from the Bell Two inquiry, which identified significant compliance failures. As a result, The Star faces a AU$15 million (US$10 million) fine and a potential casino license suspension, while the scandal has also caused its stock to plummet.
During the AGM, Steve McCann, Chief Executive Officer and Managing Director of the company, expressed confidence that The Star would make “good progress” before the March 31st, 2025, deadline set by the New South Wales Independent Casino Commission for overseeing casino operations.
McCann, who was appointed as the group’s CEO and Managing Director in June, is still awaiting regulatory approval for his appointment, which, as of November 28th, remains pending.
He noted that over the past four and a half months, the team and the Board have worked tirelessly to address the company’s challenges and establish a clear path to remediation and recovery. However, he acknowledged that the road ahead remains difficult, and The Star continues to face significant challenges.
“We have made progress on several important issues, reset our remediation plan, and improved our transparency and relationship with regulators. However, revenue has continued to decline significantly, while the costs of our transformation and the external advice and assistance we have required remain elevated,” noted the executive.
The Star’s shares were suspended from trading on the ASX on September 2nd, 2024, as the Board worked through these challenges to finalize the FY24 financial statements. Trading resumed on September 27th, 2024, but since then, the company has seen ‘continued deterioration in performance’, with losses incurred at the Group EBITDA level.
McCann emphasized that “the first priority is to restore our regulatory and social licenses to operate by continuing to actively demonstrate meaningful progress toward remediating our systems, processes, and culture.”
He added, “This revised plan has been approved by our Queensland regulators, with conditions, and delivery is now underway. The reset plan consists of 14 separate workstreams, each with numerous milestones, target dates, and independent assurance to confirm when they have been met.
“The reset remediation plan will enable us to deliver meaningful change by the end of March 2025 in the areas of cultural reform, safer gambling, compliance, risk management, financial crime, governance, and technology and data,” he concluded.
