Star Entertainment Group could be broke in a matter of weeks with the future of its casinos in Sydney, Brisbane and the Gold Coast – along with the thousands of jobs they provide – in doubt.
The gaming giant warned it has only $79million in its bank accounts and is struggling with a downturn in the number of gamblers at its venues along with more than $100million in fines it was slapped with over license breaches.
Analyst Angus Hewitt from investment research firm Morningstar told clients in a note that without a lifeline ‘the company would be lucky to make it to February 28’.
The group’s new crown jewel – a casino in the massive $3.6billion Queen’s Wharf project in Brisbane – had its grand opening just a few months ago and could see its doors swiftly close again in February, according to its largest stakeholder.
Pub tycoon Bruce Mathieson sounded the alarm this week that Star Casino could ‘go bankrupt or be bought’ within weeks as the company continues to burn through its cash reserves.
More than 3,000 staffers across the casino, hotel and retail areas help run the Brisbane precinct alone and all could go jobless if it were to close, sparking an assurance from Premier David Crisafulli that those affected would be looked after.
If Star does go bust however, it would be the largest corporate collapse since Virgin Australia buckled under Covid pressures in 2020.
The Brisbane venue and Star’s other locations in Sydney and on the Gold Coast could be divided up and sold should its money run out before a solution is found.
Queensland Treasurer, David Janetzki, has been in discussion with Star but has warned that the Queensland government was unlikely to bail the operator out.
Mr Crisafulli did not speculate on what would happen to the casino but offered his reassurance for anyone whose jobs have been left hanging in the balance.
‘I’m very confident regardless of the ownership – that’s not saying one way or another – but regardless of what happens with the ownership of that entity the focus has to be on making sure there’s jobs here,’ he said.
‘We’re not in the business of being concerned about the corporate suits who sit around a company. The future of Star is a matter for Star.’
Mr Crisafulli stressed the importance of making sure the area remained a business and recreational hub regardless of who operates the Star’s current building.
‘Our focus is on the men and women who work there, not on casino joints,’ he said.
Mr McCann also lobbied the New South Wales government for financial relief in 2024 but Premier Chris Minns was quick to rule out that option.
The NSW premier pointed to his concerns that any handouts would ‘primarily support the Star’s Queensland expansions’ instead of addressing any problems with its operations in his own state.
Star’s cash reserves dropped 46 per cent between September and December, the casino giant told the Australian Stock Exchange this week.
Since September 30 the casino has lost $70m and now only has $79m left on hand.
A number of landers have warned Star Entertainment could be in voluntary administration within months.
Star chief executive Steve McCann told stakeholders his main concern was to ‘try to deliver a viable outcome for the business’.
‘The focus is on saving jobs and providing a sustainable future for our 9,000 hardworking team members,’ he said.
Prior to Queensland’s state election in October Labor had awarded Star a casino license which the new LNP government has since contested.
Mr Crisafulli said the casino failed to fulfil its earlier commitments regarding tenant accommodation, dining and retail spaces.
‘There were commitments that were given that weren’t fulfilled, but let’s focus on the immediate priority and that is the workers who are there,’ the premier said.
Star Entertainment had also propositioned the previous Labor government for financial support which similarly did not materialise.
Labor was not satisfied that if Star did collapse that it would ever get its money back and the casino refused to stop paying its executives bonuses.
Mr Hewitt told his Morningstar clients he did not believe Star could get on its feet before its cash ran out.
‘Star needs a more immediate solution and we believe it is unlikely it can trade itself out of this predicament,’ he said.
Star Brisbane officially opened on August 29, 2024, two years behind schedule.
The $3.6 billion precinct was planned to open in stages with phase one of its reveal focusing on restaurants, bars and public spaces.
Within days of its opening however, it was already requesting tax relief from the then-Labor government which Premier Steven Miles entertained prior to the election.
‘The worst case scenario would be that they have to close their doors not long after opening them,’ Mr Miles said in September.
Star has casinos in Brisbane, Gold Coast and Sydney, with its Gold Coast location being the largest casino in Queensland.
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