Australia’s Star Entertainment Group says it expects to face costs of between AU$35 million and AU$45 million (US$23 million to US$30 million) in FY23 as part of its remediation efforts in New South Wales and Queensland.
The details formed part of a trading update provided to shareholders during the company’s Annual General Meeting on Tuesday, where newly appointed Managing Director and CEO Robert Cooke addressed investors for the first time.
Cooke took over the role last month following the departure of his predecessor, Matt Bekier, amid regulatory inquiries into Star’s operations. Star was subsequently found unsuitable to retain its licenses in NSW and Queensland, with The Star Sydney currently operating under the watch of a Special Manager.
According to Cooke, Star’s work to return to suitability will cost between AU$35 million and AU$45 million in FY23 plus recurring costs totalling around 50% of that amount each year whereafter.
He did, however, reveal that the group’s core domestic revenues during the period from 1 July to 15 November 2022 were 1% higher than the corresponding pre-COVID period. This has included a 32% increase at The Star Gold Coast and 9% increase at Treasury Brisbane – partly negated by an 11% decline at The Star Sydney.
“Our Queensland Casinos are performing strongly while Sydney has been impacted by compliance changes post the Bell Review along with some competition impacts,” Cooke said.
He also promised to focus his efforts on Star’s remediation efforts.
“We will transform our culture, be more transparent, have more robust governance, greater accountability, be open and honest with our regulators and act swiftly when issues arise,” he said. “We need to earn back the trust and confidence of all our stakeholders.
“From an operational perspective, let me assure you that the whole team, understands and acknowledges the need for change. Cultural change is part of that.
“So too is the focus on having all areas of our business operating with the highest levels of integrity. As CEO, I want our regulators and the governments we work with to see us as an operator of the highest repute.”
Tuesday’s AGM saw shareholders approve the appointments of new board members Michael Issenberg and Anne Ward, however they delivered a first strike against the director’s pay scheme with more than 25% voting against the motion. A second strike next year could see the new-look board spilled.