Star Entertainment Group flags further decline in premium gaming revenues

Australia’s Star Entertainment Group said Monday that it expects to report a 3.3% year-on-year and 4.3% quarter-on-quarter decline in group-wide revenue for the three months to 30 June 2024, impacted by further declines in its premium gaming segment.

Providing a Trading Update as the end of the financial year approaches, Star revealed that revenue from premium gaming rooms is expected to be down by 16.5% year-on-year in the June quarter, with Queensland properties facing the largest declines. This includes a 22.6% decline in premium gaming revenues at The Star Gold Coast and an 18.2% decline at Treasury Brisbane, while premium gaming at The Star Sydney is tracking down 13.2%.

By contrast, main gaming floor revenues at The Star Gold Coast are currently up 10% year-on-year, which will likely see property-wide gaming revenues down 4.9%, while those at Treasury Brisbane are currently flat, with property-wide gaming revenues expected to be down by 6.9%.

Main gaming floor revenues at The Star Sydney are tracking 6.3% higher year-on-year, which would see property-wide gaming revenues down by 0.9% versus the fourth quarter of FY23.

In its update, Star said that operating conditions since its last update in April had remained challenging due to revenue declining while operating expenses rise. Specifically, it explained, average monthly expenses have risen from AU$90.3 million (US$59.9 million) in 1H24 to AU$92.1 million (US$61.1 million) in 3Q24 to AU$92.5 million (US$61.4 million) in 4Q24 “due to ongoing remediation and transformation activities.”

In response, Star will “seek to expedite a range of initiatives to further reduce the operating cost base of the group.”

Star is currently forecasting FY24 Group Revenue of between AU$$1.675 billion and $1.685 billion (US$1.11 billion and US$1.12 billion) and normalized Group EBITDA of between AU$165 million and AU$180 million (US$109.4 million and US$119.4 million).