High-rollers abandon The Star as it braces for second inquiry

The Star Entertainment Group, an Australian casino operator, is currently facing a significant challenge as high-rolling patrons have started to avoid its three casinos in Sydney, Gold Coast, and Brisbane. This trend comes as the company's former and current senior executives are set to appear before a public inquiry.

The New South Wales Independent Liquor & Gaming Authority announced on March 15, 2023, that it would hold a new inquiry into the company's operations following allegations of money laundering, organized crime links, and other illegal activities at The Star's Sydney casino. This inquiry comes less than a year after the conclusion of a previous investigation that resulted in a AUD 100 million fine against the casino for failing to prevent money laundering.

The latest inquiry will focus on the role of The Star's senior management in handling these issues and will examine their interactions with high-rolling patrons, particularly those from China. The inquiry will also investigate whether the casino properly implemented anti-money laundering measures and complied with relevant regulations.

The departure of high-rolling patrons from The Star's casinos is a significant concern for the company, as these patrons contribute a substantial portion of its revenue. According to a report by The Australian Financial Review, high rollers accounted for around 10% of The Star's revenue before the first inquiry was announced.

The exodus of high rollers is not limited to Sydney alone. Reports suggest that high rollers have also started avoiding The Star's casinos in Gold Coast and Brisbane due to concerns about the ongoing investigations and potential negative publicity.

The Star's share price has been affected by these developments, with the stock falling by around 15% since the announcement of the new inquiry. The company's CEO, Matt Bekink, has assured investors that the casino operator is cooperating fully with the authorities and taking steps to address the issues raised in the investigation.

The inquiry is expected to begin in April 2023 and is likely to last several months. Its outcome could have significant implications for The Star's future operations and reputation. In the meantime, the company will need to work hard to win back the trust of its high-rolling patrons and demonstrate its commitment to combating money laundering and organized crime.