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Both groups used a model banned by almost every jurisdiction in the world, apart from Macau. They allowed outsiders to run private gambling operations within the confines of their casinos. That paved the way for organised Chinese crime syndicates to launder money in Australia. On Friday, RSM Club partnership the shares briefly dropped below 20c, valuing the group at just $1.2 billion. Strip away the huge money-laundering operation from mainland Chinese-based criminal gangs, and the business model upon which Australia's two big casino groups has been built suddenly is under threat. That annoying little slogan tacked on to the end of every broadcast gambling advertisement, as a warning to those with an addiction, has come back to bite casino owners and investors.
Xingchun Wang has spent more than $38 million buying shares in Star, which last week warned it was running out of money and could be weeks away from collapse if it did not secure additional financing. The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Now the chances of losing it all have been turned back onto one of Australia's biggest casino operators. "Traditionally, probity checks have taken many months for new operators in high payout casinos for blackjack across the different state jurisdictions," Mr Jones said. Swinburne University law and corporate governance specialist Helen Bird told ABC's News Channel it seemed "more than likely" the company would tip into voluntary administration.
Unless Wang has been given regulatory approval to move beyond 10 per cent of the casino group (and there is no suggestion he has), he can’t contribute to a recapitalisation of the company. If he had been lined up or approached by the Star board as part of the rescue attempt, the company would need to have disclosed any deal or association. Star shares have been suspended from trade on the Australian Securities Exchange since March after the company failed to submit its half-year accounts. Embattled casino group Star Entertainment has secured a $300 million lifeline from US gaming giant Bally's, which has made a specialty of picking up "distressed" casinos.
Star Entertainment has managed to avoid financial collapse for now after signing a deal to sell its stake in Brisbane’s Queen’s Wharf online casino Australia 2026 to its two equity partners along with other assets. Star Entertainment halted trading of its shares on Friday after a state-level casino regulator issued a damning report accusing the group of failing to clean up a culture of money laundering and fraud. Australia’s largest publicly traded casino operator has been temporarily suspended from the country’s stock exchange after failing to lodge its annual financial results. Star chief executive Steve McCann has been negotiating to lock in a different package which would leave the company’s Queen’s Wharf complex in Brisbane with two Hong Kong investors. That deal is backed by alternative asset manager Salter Brothers and includes a $750 million refinancing.
The data used in our company analysis is from S&P Global Market Intelligence LLC. Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Macquarie Group. The stock is down more than 58% in the past 12 months, and there's no saying when the sell-off might end – or if it will. There are many moving parts/challenges when considering Star Entertainment's earnings outlook with management's ability to execute the largest risk, particularly relating to cost-out and asset sales – likely beyond non-core. It cited a "degradation" in earnings expectations for FY25 due to Star's current set of challenges. Rather than seeing a potential bargin at these current levels, brokers are recommending investors steer clear of the company for now.
The collapse of the deal means Star Entertainment will retain its 50% equity interest in Destination Brisbane Consortium (DBC). Star must also reimburse the JV partners an estimated $31 million in equity contributions by 5 September. This means Star Entertainment will have to pay back the $10 million it received from the JV partners by next Wednesday. Star Entertainment has announced that the deal to sell its 50% stake in Queen's Wharf, plus other assets in Brisbane, is now off. The deal falling over would leave Star saddled with those costs, as it attempts to turn its business around with the backing of Bally's. The termination notice will come into effect next Monday unless it is withdrawn within five business day. The Hong Kong investors poised to buy Star out of Brisbane's Queen's Wharf development have threatened to walk away from the deal that was first inked back in March.
The company is burning through cash at the rate of $35 million a month, which gives it about six weeks of funds left before emptying its piggy bank. Revenue slumped 19 per cent over the last 12 months, with Star Sydney the company’s worst-performing asset. Morningstar still expects earnings to recover in the medium term as the Queen’s Wharf development ramps up, cyclical discretionary weakness turns and regulatory costs ease. The company has taken an appropriate approach to shareholder distributions with the suspension of dividends during the pandemic. The remains their intention until suitable providing it remains within its target leverage range at the time. Star has arguably underinvested in its Sydney crypto casino bonuses, however the $500 million sunk in improving its VIP gaming segment is unlikely to deter Crown casinos from capturing 60% of its VIP market share by fiscal 2025. Boosted by new developments in Queensland and a recovery from current headwinds, we project a 5% annual revenue growth for the five years ending fiscal 2029.
Star has been in talks with the owners of the other half of Brisbane's Queen's Wharf development — Hong Kong investors Far East Consortium International and Chow Tai Fook Enterprises — since mid-February. Embattled casino group Star Entertainment will stay alive, for now, after securing a $53 million lifeline in return for selling its 50 per cent stake in the new Brisbane bitcoin casino fairness. The ASX 200 and the All Ordinaries index both ended Monday's session 1.Paradise 8 bonus terms per cent lower, wiping off about $50 billion in market value. Dow Jones Industrial Average, S&P 500, Nasdaq, and Morningstar Index (Market Barometer) quotes are real-time.
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