Xingchun Wang has spent more than $38 million buying shares in Star, which last week warned it was running out of real money online slots Australia 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 live dealer casinos US 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.
Exchange operator ASX automatically suspended shares in Star on Monday morning after the Casino growth rate Lake County operator missed Friday's deadline for issuing its earnings update for the first half of the financial year. There remains a large amount of uncertainty surrounding the future of Star’s earnings recovery. The pending AUSTRAC fine, eventual outcome of its Roo Casino live casino mobile license and a probable capital raise in the coming months all weigh heavy on its future performance. The collapse in earnings since fiscal 2024 has indicated Star might not have sufficient liquidity to stay afloat amidst near-term earnings headwinds, the AUSTRAC fine and equity contributions to redevelopment. With a $200 million emergency debt facility at a rate of 13.5%, it appears Star may be buying time ahead of a potentially value-dilutive equity raise in fiscal 2025. Queensland is currently the only state where Star holds an exclusive position and consequently the company is throwing substantial amounts of capital (~$3 billion) in ensuring it stays that way.
Australian shares fell to its lowest close in more than six months, wiping off about $50 billion in market value. Star Entertainment will receive a $53 million lifeline, with its Hong Kong joint venture partners confirming they will buy its stake in the Brisbane Queen's Wharf development, pulling it back from the brink of collapse. As well as negotiating with lenders, Star has pleaded for help from state governments, and on Friday, Star chief executive Steve McCann called for its various stakeholders to come together. As it fights for survival, Star said it was continuing discussions to attempt to deal with the crunch on its finances, but there was no guarantee it would be able to reach a deal to resolve its situation. It acknowledged the uncertainty over its ability to continue operating if the negotiations were unsuccessful.
Star’s board has not been able to sign off on the accounts as the group has not been able to secure financing to ensure it won’t run out of cash as early as this week. Star allowed Macau-based junket operator Suncity to secretly operate an unbranded VIP room, referred to as "Salon 95." This was despite Australian authorities having identified Suncity as having links to organized crime. "It was unclear whether The Star could feasibly operate under less supervision, when it was exhibiting past behaviors with its license still suspended," he added.
Star investors who got excited on Monday by the left-field emergence of a mystery Macau buyer of the casino’s shares would be wise to curb their enthusiasm. There is nothing about Xingchun Wang’s taking a 5.5 per cent stake that looks like a white knight rescue attempt. Morningstar lowers our Uncertainty Rating from Extreme to very high after the results of the second bell inquiry were passed down. The scrutiny into Star’s suitability to hold a casino licence ended in the best online baccarat Australia plausible outcome that the company could have hoped for. Whilst they are currently deemed unsuitable to hold a casino license, the enquiry ruled that the license need not be revoked entirely. Star’s core asset is The Star Sydney, which at one point was generating ~70% of the group’s earnings as the only Crown Casino app download in Sydney.
The company’s chief executive, Steve McCann, needs to secure long-term financing from an unnamed party for the accounts to be signed off and for trade to resume. A deadline for the blow-up of a deal with the casino operator’s Hong Kong investors is approaching. Yesterday, there were media reports that Star was "on the brink" of inking a deal with its joint venture partners Chow Tai Fook and Far East Consortium, to buy its 50 per cent interest in the development. The falls this week have been driven by several factors, including US trade policy uncertainty at a time when fears of a looming US recession are rising. Locally, the falls have been exacerbated by more weakness in the big banks and worsened after BHP, RIO, South32, and energy giant Woodside all traded ex-dividend. "The horrific price action in the ASX200 has continued today, slipping below 8,000 for the first time in almost six months. Canstar analysis of RBA credit card statistics and in-house survey data shows that of those with credit card debt, the average amount owing is estimated to be $4,420.
