Star Entertainment Shares Plummet

(Reuters) – Shares in Australia’s no.2 casino operator Star Entertainment plummeted over 50% to a record low on Friday, as trading resumed following a second consecutive multi-billion-dollar annual loss due to a write-down in its venues’ value.

The company erased A$1.4 billion ($963.90 million) from the value of its casinos located in Sydney, Brisbane, and the Gold Coast, citing “challenging trading conditions” and regulatory changes, including a shift to mandatory cashless gambling.

For the year ending June 30, the statutory net loss after tax was A$1.69 billion, compared to A$2.44 billion the previous year.

Morningstar noted, “The earnings collapse is worse than we expected,” subsequently cutting its 2025 earnings forecast for Star by a third. They also revised longer-term earnings lower, indicating reduced profitability amid a tighter regulatory environment.

At 0032 GMT, Star’s stock fell as much as 54.4% to A$0.205, making it the worst performer on the ASX 200 index.

Trading of Star shares had been suspended on Sept. 2 for failing to file its annual report for fiscal 2024 timely. The results were published four weeks late on Thursday, where Star indicated it may divest assets to facilitate ongoing restructuring and address regulatory issues.

In recent times, both Star and its larger competitor Crown Resorts have faced multiple inquiries concerning breaches of anti-money laundering regulations. A government-ordered inquiry found issues with Star’s governance at its Sydney location, which could lead to increased regulatory scrutiny and fines.

Star is also expected to respond to a notice from the New South Wales gambling regulator regarding a report that highlighted delays in addressing governance and cultural concerns.

($1 = 1.4524 Australian dollars)