Star Sydney Sees 11% Drop In Revenues
Star Entertainment has revealed financial details regarding its Sydney casino. According to reports, revenue from the casino is down 11% from pre-COVID levels. Part of this is due to regulatory issues plaguing the casino.
Furthermore, the casino has revealed that the New South Wales Independent Casino Commission (NICC) does not endorse its independent monitor. Moreover, it does not seem that the NICC will approve its remediation plan for quite some time.
Star Sydney Sees 11% Revenue Drop
Yahoo Finance and other sources are reporting on Star Sydney revenues from July 1 through November 15. According to reports, the casino is down 11% from pre-COVID levels. According to Managing Director Robbie Cooke. “Our Queensland casinos are performing strongly while Sydney has been impacted by compliance changes post the Bell Review along with some competition impacts.”
Gold Coast and Brisbane revenues show an increase of 32% and 9%, respectively. This was enough to see the entire company’s revenue increase by 1% overall. While regulatory issues are part of the problem, it is not the only issue.
Crown Resorts has opened its Sydney casino, which has impacted Star Sydney’s numbers. According to Cooke, Crown had a targeted program for marketing its new casino, and that Star had anticipated this tactic. The company is implementing its own plan to keep and regain customers. Cooke states, “This is part of the normal competition that you see when you’ve got two properties in one market.”
Mr. Cooke also states that costs pertaining to remediation will be between $35 and $45 million for FY23. He then says that about half of that amount will be recurring past FY24. At this point, the focus is to say in business.
The company will take numerous steps to rebuild, including properly monitoring agents and combating potential financial crime by players. “The onus is now on us to remediate and to show the regulator we can be suitable to again be afforded the privilege of holding a casino licence in NSW.”
NICC Does Not Approve of Remediation Plan
Last week, various sources reported on Star Entertainments’ announcement regarding their remediation plan. In August, the company hired Allen & Overy Consulting to be an independent monitor for the company. The purpose was to provide monitoring and reporting services to Star’s board regarding remediation actions.
Earlier this week, Star Entertainment published clarification regarding this appointment. According to the release, “The Star understands that the NSW Independent Casino Commission (NICC) does not endorse the appointment of an independent monitor at this time and as such A&O’s appointment is not made or endorsed by the NICC.”
Furthermore, the company states that the remediation program from September 27, 2022, is just preliminary. The NICC does not endorse the program. Moreover, the Manager of the Star Sydney Casino does not anticipate that the NICC will approve a remediation program for some time.
Nicholas Weeks is the current Manager of the Star Syndey Casino and is the holder of the casino’s license. The NICC appointed him following the suspension of Star’s license. The release from Star Entertainment is more of a general announcement to clear up any confusion pertaining to the remediation plan.
The NICC is in complete control of Star Sydney, and the casino must work to prove that it is capable of holding a licence. It will likely be quite a while before the NICC consider moving forward with a remediation plan, assuming that Star Entertainment does everything required of it.
