In the high-stakes world of casino operations, the house does not always win. This seems to be a lesson that Star Entertainment Group is learning as it faces the possibility of collapse, with the potential loss of thousands of jobs hanging in the balance.
The casino giant, which operates three major casinos across New South Wales and Queensland, issued a warning that it could run out of cash by the end of February. Its Chief Executive Steve McCann has specifically requested tax relief from the NSW and Queensland state governments after revealing that it only has $79 million left in the bank this month.
However, the response from NSW Premier Chris Minns has been unequivocal, saying, ‘I have said all I am going to say about it. We do not have any (more assistance). We did sit down with Star over a year ago and work out a rescue package.’
‘As I said, we have got funding requests right across NSW, from roads to psychiatrists to nurses to the railways. I mean, I do not have money for casinos, I am sorry.’
In contrast to the NSW government’s firm rejection, Queensland Premier David Crisafulli has adopted a more open, albeit cautious, approach. While not ruling out support for Star Entertainment, Crisafulli has emphasised the need to secure a ‘good deal’ for Queensland taxpayers and the 6,000 state workers employed by the casino.
‘My support is for the workers and making sure that the casino continues to operate. I am confident we can find a way to make that occur that represents a good deal for all Queenslanders,’ he said.
‘…I don’t reckon there are many Queenslanders [who] care about Star or its CEO or board but there are bucketloads [who] care about the facility and people who work there.’
Star Entertainment’s plight has become a public spectacle, with the company’s updated statement to the Australian Securities Exchange (ASX) revealing a significant slump in revenue, down to $299 million in the December quarter.
Moreover, the company’s financial woes are not limited to operational revenue. The company owes the NSW Independent Casino Commission a hefty $15 million in penalties related to its Sydney operations, with the first instalment due in December 2024, and the second and third payments due in March and June this year.
It cites ‘difficult trading conditions,’ among other financial drains, as reasons for its rapid cash burn, which amounts to about $50 million per month.
With 9,000 hospitality jobs at risk, the potential collapse of Star Entertainment could have a significant impact on the industry and the economy.
Our YourLifeChoices readers, what are your thoughts on the NSW government’s refusal to support Star Entertainment? Share your opinions with us in the comments below.
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