Entertainment Faces $18M EBITDA Loss Amid Regulatory Challenges and New Ventures
Star Entertainment has disclosed an EBITDA loss of AU$18 million for the latest quarter, influenced by regulatory challenges and the operations of its new Star Brisbane joint venture.
In a recent announcement through an ASX filing, Star Entertainment revealed a revenue of AU$351 million for the previous quarter, marking an 18% decrease from the previous year and an 11% decline from the last quarter. The company linked the downturn to a challenging operational environment, compounded by new regulations including mandatory carded play and cash limits.
The financial update follows the Bell Two ruling on 17 October, where Star was deemed unsuitable for licensure in New South Wales but avoided license revocation. Despite this, Star Sydney faced a significant fine of AU$15 million, payable in installments over the next year.
Star Sydney alone reported a revenue of AU$186 million and an EBITDA loss of AU$22 million for the first quarter, reflecting a continued downward trend influenced by system outages and changes in consumer behavior in the premium gaming sector.
Mandatory carded play and cash limits were fully implemented by 19 October, leading to further revenue declines. The casino noted a 12% revenue drop since the enforcement of these regulations.
Despite the overall challenges, Star Gold Coast showed a revenue increase of 6% from the last quarter, though its EBITDA dropped by 70% from the previous year. The new Star Brisbane development, a joint venture, opened its doors on 29 August and reported AU$45 million in revenue within its first 33 days.
Star is actively managing its finances, with a slight reduction in operating expenses and an increase in cash reserves, standing at AU$149 million at the quarter’s end. This includes proceeds from the sale of Treasury Brisbane and a newly secured AU$200 million debt facility to support ongoing operations and development.
The company is also focusing on a cost-cutting program aimed at saving at least AU$100 million annually, with full implementation expected by March 2025.
Star Entertainment’s latest financial performance reflects the impact of regulatory changes and market challenges. However, new ventures like Star Brisbane and strategic financial management may provide a pathway to recovery and growth in the coming months.
