(Bloomberg) — Star Entertainment Group Ltd. has been allowed to keep running its flagship Sydney casino under government supervision, a letoff for the unprofitable gaming operator after a series of damning governance and cultural failings.
The embattled company was hit with a A$15 million ($10 million) fine in the wake of the findings, Philip Crawford, chief commissioner of the New South Wales Independent Casino Commission, said at a press conference in Sydney on Thursday.
“There are some green shoots for this company,” Crawford said, pointing to an improved relationship with the regulator under incoming Chief Executive Officer Steve McCann. He said the company’s future lands almost entirely in the hands of McCann, who comes across as an impressive executive.
Still, the biggest risk to Star’s suitably to hold on the Sydney license is its fragile financial state, Crawford said.
The struggling Australian company still faces crises on multiple fronts and is fighting for its survival. A long-awaited financial update last month showed the Star needs to raise even more capital and trading conditions are deteriorating. The stock has slumped 50% this year to be trading near a record low.
An inquiry in late August found Star remained unfit to operate its Sydney casino, and the regulator’s decision had been hanging over the company for weeks.
McCann has formed a plan to stabilize the company, though it involves borrowing funds at 13.5%, a junk-bond rate usually reserved for distressed borrowers.
Star’s Sydney casino has been run by a government-appointed manager since a report in 2022 found it had lax anti-money laundering controls, allowed patrons to flout China’s capital controls and encouraged problem gamblers.
(Adds further comment from regulator in third paragraph.)
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