Dark times for Star: Doubt cast on casino giant’s future in face of possible huge fines

Auditors to the troubled casino group Star have warned that massive fines and sanctions it faced “cast significant doubt on the company’s ability to continue as a going concern”.

Sep 29, 2022, updated Sep 29, 2022
Health Minister Shannon Fentiman. (AAP Image/Jono Searle)

Health Minister Shannon Fentiman. (AAP Image/Jono Searle)

The warning, contained in Star’s financial report, refers to the potential $100 million fine it faced in NSW over findings from the Bell inquiry which related to alleged money laundering and other activity at its Sydney casino. It was found to be not suitable to hold a casino licence in NSW.

Similar activity was alleged to have occurred in Queensland at the Brisbane and Gold Coast casinos and the Gotterson inquiry is due to hand its report to Attorney General Shannon Fentiman on Friday.

Cabinet is expected to consider the Gotterson report as early as next week and a response could follow its public release. A formal response from the Government could take up to three months.

Apart from casino regulator actions, Star also faces potential court sanctions stemming from AUSTRAC’s investigations over money laundering which could be severe if the billion-dollar fines imposed on the banks were a reference point.

Star has already reduced the value of the Sydney operations by $162 million, which was recognised as an impairment.

There was also a class action brewing.

In relation to the fines and other potential sanctions, Star’s auditors, EY, said these matters indicated that material uncertainties existed that may cast significant doubt on the company’s ability to continue as a going concern.

“Significant adverse outcomes in relation to these matters may have the result in the group not being able to continue as a going support unless the group continues to have the support of its lenders,” EY said.

However, the financial report also contains a statement from directors which said the “going concern” basis of accounting was appropriate given that it had a net cash position of $3.4 billion as of June 30.

There had also been a strong rebound in its cashflow following the end of Covid restrictions.

Star also said there was a variety of disciplinary actions open to regulators following the finding that it was unsuitable to hold a licence.

“The group is expected to continue as a going concern provided these outcomes as a whole are not sufficiently onerous as to prevent the company from settling its obligations and the group is able to meet its debt covenants,” it said.

“A breach in bank covenants, if not amended or waived by lenders, may lead to those borrowings becoming due and payable.”

The auditor’s concerns increased the risk for the Queensland Government because Star is also the developer of the $3.6 billion Queens Wharf project in Brisbane, which was expected to be completed next year.








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