Australia’s Star Entertainment is expecting to suffer a massive financial blow, not only from the AUD200 million (US$138.3 million) in fines they are obligated to pay, but also from the New South Wales (NSW) government’s plan to raise taxes on casinos. Star anticipates this could result in an impairment of up to AUD1.6 billion (US$1.1 billion).
Star Sydney casino, located in Australia, is one of the properties set to be heavily impacted by the new tax regulations. The reform, which is scheduled to take effect in July, is expected to detrimentally affect Star’s profits, as half of the company’s fiscal 2022 revenue is generated from the Star Sydney.
In response, Star will conduct an immediate review of its Sydney operations, including its assets, to prepare for any potential changes and optimize value for its shareholders.
The NSW tax reform is a major point of contention in the upcoming election on March 25, with the government intending to use the funds to offer aid to communities affected by floods and wildfires.
Star is also still paying the price for their previous breach of regulations, which has led to an increase in oversight and the expenditure of at least AUD20 million (US$13.83 million). The company faces a number of investor-led lawsuits and believes the impairment could be as high as US$1.1 billion, although it could also be as low as AUD400 million (US$276.6 million).
The news has had a dramatic effect on Star’s stock, dropping from AUD1.88 (US$1.30) on February 10 to AUD1.48 (US$1.02) on Monday. It later recovered slightly to AUD1.465 (US$1.01).
The gambling industry in Australia is undergoing a large scale transformation, regardless of the result of the state election. Cashless gaming is set to be introduced in NSW and potentially the rest of the country within five years.
In an effort to ensure operators meet the government’s expectations, Senet, a gambling regulation law firm based in Australia, has launched the Senet Assure program. The program offers accreditation to operators and Norths Collective, a company that owns a few pubs in the country, is currently undergoing its assessment.
In the midst of all this, Star’s Star Gold Coast property has seen an increase