Star in trading halt as pokies pain looms

Star Entertainment Group has entered a trading halt ahead of its half-year results as the casino giant mulls renegotiating its debt.

Last week, The Star issued a dire market outlook ahead of next week’s results, which sent the share price sliding more than 30 per cent to $1.28. In it, the group flagged it faces a write-down of between $400 million to $1.6 billion, plus millions of dollars in remediation and transformation costs, and is considering an “urgent review” of its Sydney operations and assets as a result.

The final figure is only expected to total $1.6 billion if the NSW government proceeds with a proposed tax hike on casino table games and poker machine earnings.

In the past six months, The Star’s share price has slumped more than 65 per cent to $1.47 and its market capitalisation has plummeted from $4 billion in 2021 to $1.4 billion.

Cooper Investors – which previously held an 8 per cent holding in the company – sold close to 20 million shares following the announcement and is no longer a substantial shareholder in Star Entertainment.

Under the proposed increase, poker machines in casinos would attract a top tax rate of 60.67 per cent. It is expected to take effect from July.

A spokesperson for NSW state treasurer Matt Kean told this masthead on Friday, the extent of The Star’s financial stress was not clear when the proposal was raised in December and his department has been engaging in discussions with the group.

It’s not yet clear whether this means the government will revise the proposal.

“The Star faces financial difficulties due to the fines and loss of revenue caused by their historic, systemic, severe regulatory failings and illegal activities that were not visible to the market,” the spokesperson said.