Star Sydney Could Close Next Summer as Remediation Efforts Fail to Impress Regulators
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Posted on: December 7, 2023, 06:48h.
Last updated on: December 7, 2023, 11:12h.
Star Entertainment had until January of next year to get its house in order at The Star Sydney casino in New South Wales (NSW) and show that it was capable of complying with regulations. It then received a six-month reprieve, but still isn’t meeting expectations, putting the casino’s future in jeopardy.
Over the past several years, Star has been the subject of regulatory and parliamentary inquiries across Australia. The investigations stem from the revelation that the company repeatedly violated anti-money laundering and counter-terrorism financing (AML/CTF) regulations.
Last October, NSW, where The Star Sydney is located, suspended Star’s gaming license, but gave it time to clean up its act to avoid a revocation. The NSW Independent Casino Commission (NICC) isn’t optimistic that the company is taking the issue seriously enough.
Lowering the Flagship
The Star Sydney is Star’s flagship property, but it could close by the end of next June if Star doesn’t turn things around. The NICC, according to a report by The Sydney Morning Herald, is closely watching its every move and could be considering shutting it down.
A spokesperson for the NICC said the entity “is not satisfied” that The Star has sufficiently fulfilled the terms of a remediation agreement. It is reportedly still unable to operate without an external supervising manager, a condition that was part of the agreement.
At the time of NSW’s decision on The Star Sydney, officials appointed an external manager to monitor the casino’s operations and ensure compliance. If the property showed it could follow the rules and regulations without supervision by this coming January, the manager would leave.
That hasn’t happened, and the NICC will give Star six more months to prove its worthiness. If it doesn’t, the commission’s spokesperson warned that “the manager will be retired, and the doors will close.”
Star is already doubling its efforts to comply. It had previously acknowledged, via a company filing in November, that the NICC wasn’t happy and understood that this would be “the final extension” it received.
Star Stock Still Struggling
The revelation out of NSW, coupled with a similar situation in Queensland, isn’t instilling a lot of confidence in Star’s stock. It’s still at the lowest point it has been since it first appeared on the Australia Securities Exchange.
Last month, Queensland, where Star operates the Treasury Brisbane and The Star Gold Coast casinos, announced that it had given Star a six-month reprieve on its license status. The company has until May 31, 2023, to show the state that it’s complying with regulations.
In the meantime, Star’s stock continues to suffer. It’s fallen way down from its all-time high of AU$5.22 (US$3.42) on Feb. 9, 2018. At the end of last week, it was trading at just AU$0.50 (US$0.33).
The stock has found some support since then, although it isn’t showing signs of stability. This week, it has bounced up and down between AU$0.51 and AU$0.56 (US$0.33 and $0.37). As of this article, it sits at AU$0.54 (US$0.35).
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