The Star Entertainment Group reported a 6% revenue increase to $301 million and a return to EBITDA profit in Q2 FY26, driven by stable Sydney trading, seasonal Gold Coast strength, and a key Brisbane operator fee. Strategic investments and refinancing efforts mark a pivotal phase for the company.
- Q2 FY26 revenue up 6% to $301 million with EBITDA profit of $6 million
- Stable Sydney trading despite regulatory challenges and cash limits
- Seasonally stronger Gold Coast performance and higher Brisbane operator fee
- $300 million strategic investments completed by Bally’s and Investment Holdings
- Ongoing refinancing process amid financial covenant pressures and regulatory uncertainties
Quarterly Financial Performance
The Star Entertainment Group has reported a notable improvement in its financial results for the second quarter of fiscal year 2026. Revenue rose 6% from the previous quarter to $301 million, while the company swung from an EBITDA loss of $13 million in Q1 to a $6 million profit before significant items in Q2. This turnaround reflects a combination of factors including stabilised trading conditions in Sydney, seasonal upticks on the Gold Coast, and a substantial operator fee from its Brisbane operations.
Despite the positive momentum, trading levels in Sydney remain below historical averages, impacted by regulatory measures such as mandatory carded play and daily cash limits. These restrictions, fully implemented in October 2024, have led to a 19% decline in average daily revenue compared to pre-regulation periods. Conversely, the Gold Coast property benefited from seasonally stronger volumes, with gaming revenue increasing by 4% quarter-on-quarter.
Strategic Investments and Joint Venture Developments
In November 2025, The Star completed $300 million in strategic investments from Bally’s Corporation and Investment Holdings Pty Ltd, which now hold approximately 38% and 23% of the company’s issued capital respectively. These investments have prompted changes to the Board and executive management, including the appointment of Bruce Mathieson Jnr as CEO and Managing Director, and the pending regulatory approval of Don Pasquariello as a non-executive director.
Meanwhile, The Star is progressing with its exit from the Destination Brisbane Consortium joint venture, having entered binding agreements with Chow Tai Fook Enterprises and Far East Consortium. The company recognised $26 million in operator fee revenue this quarter related to this transaction, reflecting both fixed monthly fees and a true-up of prior periods. Completion of this transaction remains subject to several conditions, with all parties reportedly committed despite the expiration of the initial sunset date.
Refinancing and Liquidity Challenges
The Star is actively engaged in a refinancing process ahead of a critical compliance certificate due in mid-February 2026. The company acknowledges that some financial covenants under its Senior Facility Agreement are unlikely to be met, but notes that any breaches may be deferred if refinancing commitments are secured by the end of March 2026. The group’s liquidity position includes $130 million in available cash and total cash and deposits of $239 million, though cash levels have declined from the previous quarter.
Adding complexity, the outcome of an outstanding AUSTRAC judgment remains uncertain and could materially affect the company’s capital management strategy. Regulatory pressures persist, with Sydney’s casino licence still suspended and other licences subject to ongoing government oversight and special management arrangements.
Outlook and Operational Review
Looking ahead, The Star is conducting a review of its operational resourcing and strategy in consultation with major shareholders. The company’s ability to continue as a going concern depends on multiple interrelated factors, including refinancing success, regulatory approvals, and resolution of legal matters. Investors will be watching closely as The Star navigates this transitional period marked by strategic repositioning and regulatory scrutiny.
Bottom Line?
The Star’s Q2 rebound sets the stage for a critical refinancing and regulatory milestone in early 2026.
Questions in the middle?
- Will The Star secure refinancing commitments to avoid covenant breaches by March 2026?
- How will the unresolved AUSTRAC judgment impact The Star’s capital and operational plans?
- What changes will emerge from the ongoing review of The Star’s operational strategy and resourcing?