Regulatory Risks and $471M Loss Put The Star’s Future in Question
The Star Entertainment Group reported a challenging FY25 with a $471.5 million statutory net loss and a $77.1 million EBITDA loss before significant items, driven by regulatory reforms and market share declines. The group secured a $300 million strategic investment to support its turnaround efforts amid ongoing legal and licensing uncertainties.
- 29% decline in group revenue, driven by 37% drop in gaming revenue
- EBITDA loss of $77.1 million before significant items in FY25
- $300 million strategic investment from Bally’s and Investment Holdings
- Material uncertainty over going concern due to regulatory and financial risks
- Exit from Destination Brisbane Consortium joint venture targeted by November 2025
A Year of Financial Strain
The Star Entertainment Group has revealed a tough financial year ending June 2025, posting a statutory net loss of $471.5 million and an EBITDA loss of $77.1 million before significant items. The results reflect a 29% drop in group revenue to $1.19 billion, primarily due to a 37% plunge in gaming revenue. This decline was driven by a combination of regulatory reforms, the implementation of a comprehensive remediation program, and a notable loss of market share.
Gaming revenue was particularly hard hit, with The Star Sydney and Gold Coast properties experiencing steep declines amid tighter controls such as mandatory carded play and cash limits. Non-gaming revenue remained relatively stable but was insufficient to offset the downturn in core gaming operations.
Strategic Capital Injection and Cost Discipline
In response to these challenges, The Star achieved a targeted $100 million cost reduction, reflecting disciplined operational adjustments. Crucially, the group secured a $300 million strategic investment from Bally’s Corporation and Investment Holdings Pty Ltd, with $233 million already received and the remaining $67 million contingent on regulatory approvals expected by October 2025.
This capital injection is designed to bolster liquidity and support the company’s turnaround initiatives, including exiting the Destination Brisbane Consortium (DBC) joint venture. The Star aims to complete this exit and consolidate its Gold Coast assets by the end of November 2025, which would relieve it from a significant parent company guarantee linked to $700 million of DBC debt.
Regulatory and Legal Cloud Over Future
The Star’s financial outlook remains clouded by substantial regulatory and legal uncertainties. The group faces an impending AUSTRAC penalty judgment expected imminently, with the quantum and timing still unknown. Additionally, the company must secure financial covenant waivers from lenders by September 2025 to maintain its debt facilities.
Casino licence suspensions at The Star Sydney and Gold Coast properties persist, with ongoing remediation plans and submissions to regulators such as the NSW Independent Casino Commission and Queensland’s Office of Liquor and Gaming Regulation. The group’s ability to restore these licences hinges on demonstrating a viable financial future and compliance improvements.
Trading and Near-Term Outlook
Trading conditions remain soft into FY26, with July 2025 EBITDA recording a $7.4 million loss, though this marks a slight improvement over the previous quarter. The Star Sydney continues to face revenue pressures, while the Gold Coast property showed modest gains driven by higher win rates and non-gaming revenue growth.
Near-term priorities focus on resolving the AUSTRAC penalty, securing lender waivers, completing the DBC exit, and advancing remediation milestones. The group is also pursuing further revenue growth initiatives and additional cost reductions to stabilize operations.
A Pivotal Moment for The Star
The Star Entertainment Group stands at a critical juncture. Its ability to navigate regulatory hurdles, finalize strategic transactions, and restore market confidence will determine whether it can reverse its fortunes and sustain its position in Australia’s competitive casino sector.
Bottom Line?
The Star’s FY25 results underscore a precarious path ahead, with regulatory outcomes and capital structure decisions set to define its survival and recovery.
Questions in the middle?
- What will be the size and timing of the AUSTRAC penalty judgment?
- Will lenders grant the necessary covenant waivers to avoid default?
- Can The Star successfully restore its casino licences and regain market share?