The Star Faces Refinancing Risks Amid Regulatory Suspensions and Pending AUSTRAC Judgment

Quarterly Financial Performance

The Star Entertainment Group has reported a modest revenue uptick of 5% in the first quarter of fiscal 2026, reaching $284 million. This marks a positive shift from the previous quarter’s $270 million, driven largely by stronger volumes on the Gold Coast and a higher operator fee from The Star Brisbane. Despite this, the company remains in the red with an EBITDA loss of $13 million, though this is a significant improvement from the $27 million loss recorded in Q4 FY25.

Trading conditions continue to be challenging, especially in Sydney where mandatory carded play and daily cash limits have suppressed gaming revenues. Since full implementation of these restrictions in October 2024, average daily revenue at The Star Sydney has declined by 18%. However, hospitality revenues have shown some resilience, partially offsetting the gaming downturn.

Strategic Joint Venture Exit and Investment

In a major strategic development, The Star has entered binding agreements to exit the Destination Brisbane Consortium (DBC) joint venture, which includes disposing of interests in the Festival Car park joint venture and the Treasury Hotel and Car Park. This move aims to consolidate the Group’s position on the Gold Coast and streamline its asset portfolio. Completion of this transaction remains subject to several conditions, including regulatory approvals.

Complementing this, The Star has completed receipt of a $300 million strategic investment from Bally’s Corporation and Investment Holdings, with the final tranche received in October 2025. This capital injection is expected to bolster the Group’s liquidity and support its ongoing capital management strategy, although it too awaits outstanding regulatory approvals.

Liquidity and Debt Management

The Group’s liquidity position remains under pressure, with available cash at $168 million as of 30 September 2025, down from $234 million at the end of the previous quarter. The Star prepaid $61 million of its senior debt facility using proceeds from asset disposals, reflecting active debt management efforts. Senior lenders have granted covenant waivers for the September quarter, but the Group faces refinancing risks if future waivers are not secured, particularly for the December quarter.

The company’s ability to continue as a going concern hinges on several material uncertainties, notably the pending AUSTRAC judgment, which could materially impact its financial position and refinancing options. The Group estimates it has approximately 4.7 quarters of funding available at current cash burn rates, underscoring the importance of successful capital management and regulatory outcomes.

Regulatory Environment and License Status

Regulatory challenges remain a significant headwind. The New South Wales Independent Casino Commission has extended the suspension of The Star Sydney’s casino licence and the Manager’s term until March 2026. Similarly, the Queensland Government has deferred suspension of The Star Gold Coast’s licence and extended the Special Manager’s appointment to September 2026. The Star Brisbane’s external adviser appointment has also been extended to the same date.

Mandatory carded play and cash limits continue to weigh on operations, with NSW maintaining a $5,000 daily cash limit until August 2027, while Queensland’s implementation remains pending. These regulatory measures have materially affected gaming revenues and will likely continue to influence the Group’s performance in the near term.