Sydney Star could close next summer as turnaround efforts fail to impress regulators
Star Entertainment has until January next year to complete the overhaul of The Star Sydney casino in New South Wales (NSW). However, the casino was later given a six-month reprieve but still failed to meet expectations, putting the casino's future at risk.
In recent years, Star has been the subject of Australian regulatory and parliamentary inquiries. The investigation was based on findings that the company had repeatedly breached anti-money laundering and counter-terrorism financing (AML/CTF) regulations.
The Star Hotel in Sydney is the flagship hotel of the Star Group, but it may close by the end of June next year if the Star Group does not turn things around. The Sydney Morning Herald reports that NICC is closely monitoring its every move and may consider shutting it down.
NSW suspended Star's gambling license last October but gave the company time to clean up its act to avoid being revoked. The New South Wales Independent Casino Commission (NICC) is not optimistic that the company is taking the issue seriously enough.
Failed follow-up
A spokesman for NICC said the company was "not satisfied" that The Star had fully met the redevelopment conditions. It was reported that operations would not be possible without an external monitoring manager, which is part of the agreement.
When New South Wales decided to open The Star Sydney, officials appointed an external manager to oversee the casino's operations and ensure compliance. If the hotel proves by January that it can comply with rules and regulations without supervision, the manager will leave.
But that didn't happen and NICC will give Star another six months to prove his worth. If this is not the case, a council spokesman warned, "managers will retire and doors will close".
Star has doubled down on its efforts to comply with regulations. The company previously acknowledged in a company filing in November that NICC was not satisfied with the decision and understood it was the "last extension" it had received.
Celebrity Stock War
The revelations in New South Wales and similar situations in Queensland did not inspire confidence in Star shares. The index remains at its lowest level since the ASX first emerged.
Last month, Queensland, which operates the Brisbane Treasury Casino and the Gold Coast Star Casino, announced it had granted Star a six-month reprieve on its license. The company has until May 31, 2023, to demonstrate compliance to the state.
Star's stock continues to fall. That’s down sharply from its all-time high of A$5.22 ($3.42) set on February 9, 2018. As of late last week, it was trading at just A$0.50 ($0.33).
The stock has since found some support but shows no signs of stabilizing. Its gains for the week ranged from A$0.51 to A$0.56 ($0.33 to $0.37). At the time of writing, the price is A$0.54 (US$0.35).
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Source: www.casino.org
