Star Casino to slash 500 jobs and freeze on salaries

Star Entertainment plans to cut 500 jobs and freeze salaries after a plunge in its casinos’ revenues.

In a trading update provided to the exchange, the gambling giant, which owns casinos in Sydney, Brisbane and the Gold Coast, revealed that its pre-tax revenue would fall by $80 million to $280 million.

The group is experiencing a significant and rapid deterioration in operating conditions, particularly in The Star Sydney and Star Gold Coast.

“This is largely driven by the growing impact of regulatory operational restrictions and exclusions, as well as emerging weaknesses in consumer discretionary spending.”

Star said the loss of 500 jobs for its 8,000 employees contributed to a wage and bonus freeze, along with other cost-cutting measures.

The casino hoped to save $100 million in spending for the next fiscal year.

The strong 1H FY23 performance of the group’s properties in Queensland, as reported in February, which was driven by strong domestic revenues over that period (relative to pre-Covid levels, has deteriorated in recent weeks, particularly at the Gold Coast,” the company said.

To put the business environment into perspective, the group’s current earnings performance is at an all-time low – excluding the Covid-19 period.

“If these current conditions continue through the remainder of the fiscal year and do not change materially, underlying EBITDA for FY23 is expected to be in the range of $280 million to $310 million.”

Star Entertainment is proceeding with the planned sale of the Sheraton Grand Mirage on the Gold Coast.

It has also employed a consultancy to assess operations at the Sydney casino.

In February, The Star revealed an after-tax net loss of $1.3 billion for the December half of last year.

That included fines of more than $200 million following investigations in Queensland and NSW last year, both of which found Star “unfit” to be licensed.

The Star said the job cuts, wage freezes and other planned measures would save $100 million from the operating budget for the next financial year (pictured The Star Casino in Sydney)

The casino giant was also factored in another $150 million hit, expected to be levied by financial watchdog AUSTRAC.

In response to questions, the casino group said it is ready to “do whatever it takes” to restore legitimacy.

The company appointed a law firm as an independent observer because it promised a cultural review.

The investigations came in response to media investigations that alleged Star casinos allegedly facilitated money laundering and large-scale fraud.

NSW watchdog, the Independent Casino Commission, has appointed former NRL boss Nicholas Weeks as an independent special manager to oversee Star’s operations both in that state and Queensland.

The Queensland government has threatened to suspend Star’s gaming license if the operator can’t prove it has cleaned up its act by the end of this year.