Troubled Star Entertainment Group suspended from trading in Australia

The Sydney-based exchange issued the announcement on Monday morning after Star failed to publish its annual financial report by last Friday’s (31 August) due date.

The casino group had already requested a trading halt on Friday after Adam Bell SC’s latest damning report covering its operations was published on the same day by the NSW Independent Casino Commission (NICC).

Star was one of six companies who were today suspended from trading by the ASX. Each were in breach of Listing Rule 17.5 for not lodging the relevant periodic report by the due date. Star announced as recently as 19 August that its report for the financial year ended 30 June 2024 would be published on 31 August.

Star is preparing to announce a $1.4bn write-down of its casino assets and a major cost-cutting programme, the Australian Financial Review reported on Monday. The refunding was being sought to help it trade through the next six months and retain its casino licence in Sydney.

Bell 2 report released

Star was deemed unfit to hold its NSW licence by the first Bell inquiry in 2022. Since then, Star Sydney has since been under the supervision of a state-appointed manager – Nick Weeks. Weeks’ term has been extended multiple times and currently runs through September.

The second inquiry, dubbed Bell 2 when launched in February, was published on Friday and “validated the concerns that prompted the second inquiry” according to the NICC. The body said it is considering next steps for the future of the suspended casino operator.

The report concedes that some improvements have been made since 2022, including a greater level of transparency and cooperation. However, the NICC said the report underscores concerns that it was not receiving all the facts from The Star at a time when it needed certainty the company could fund and prioritise an urgent business turnaround.

The NICC is contemplating Bell’s findings, including four compliance breaches, and said it will respond in due course.

NICC chief commissioner Philip Crawford said: “The Bell Report reveals a company that had not moved quickly enough to address the governance and cultural concerns raised in the first Bell Report. It has only very recently turned its attention to dealing with challenges that should have been prioritised earlier.”

Bell’s original report outlined anti-money laundering and social responsibility failings at The Star Sydney stretching back years. A year later, a report into Star Sydney’s progress found the casino had implemented 22 of 30 recommended measures from the Bell report.

Impact on Star Entertainment’s financial performance

Regulatory action has, understandably, had an impact on Star’s financial results. Last August, Star announced a full-year loss of AU$2.4bn (£1.24bn/€1.46bn/US$1.57bn).

Star noted $2.8bn of outgoings labelled “significant items” in the year. These were linked to the series of fines the operator faced.

A $2.2bn non-cash impairment was reported for Sydney, Gold Coast and Treasury Brisbane goodwill and property assets. There were also regulatory and legal costs of $595m, debt restructuring costs of $54m and redundancy costs of $16m.

Those costs, minus a positive and growing EBITDA of AU$317m, meant an after-tax loss of AU$2.4bn.