Casino’s survival in doubt after $307m loss
Star Entertainment reported a $307 million loss for 2026, including asset writedowns, as its auditors reiterated their significant doubts about the group’s survival prospects. The loss follows reports from this masthead highlighting the group’s struggles with the reforms needed to win back its casino licences.
Star chief executive, pokies billionaire Bruce Mathieson jnr, acknowledged challenges for the group, which should soon hear the outcomes of a fine for repeated money-laundering breaches and, separately, its suitability to hold the licences to the casinos it operates.
“Returning to suitability remains critical to our future, and the work required to achieve that objective has and is being increasingly embedded in how we operate every day,” Mathieson told investors via the annual report. “We have made significant progress against our remediation commitments, which supported The Star’s submissions to the Queensland and New South Wales governments on its suitability to hold casino licences in those jurisdictions, and we await the outcomes of those processes.”
Star has been embroiled in a spiralling financial crisis since a high-powered inquiry into the casino operator in 2022, following allegations that the company had enabled suspected money laundering and organised crime in its casinos. Gambling revenue has fallen, and regulatory costs have mounted following the run of scandals – which led to the loss of all three casino licences.
Recent reports in this masthead have raised questions about Star’s commitment to reforms to help it regain its casino licence, as its top executives try to make the casino operator financially viable under new regulatory restraints in NSW and Queensland.
A leaked recording of Star Entertainment Group’s most senior executives has captured its Sydney casino boss and Mathieson jnr complaining of the risk and compliance measures forced onto the group.
“We get these fines, which I think are just disproportionate to what is happening, and … all we’re doing is existing to pay a fine,” Mathieson jnr said.
“We keep on restricting ourselves tighter and tighter. We’re coming to a pretty critical time with obviously licences and all that sort of stuff, but it should be quite obvious to everyone that unless we can breathe … every time we get up to breathe, we cop another hit.”
In response to the weekend’s revelations, NSW casino regulator Philip Crawford ordered Nick Weeks to conduct an urgent review.
He said that Weeks had last week provided him a report detailing governance issues as he weighed whether to return Star its gaming licence in Sydney.
“The NICC’s concern has always been to ensure NSW casinos uphold community expectations by maintaining responsible and compliant operations which are resistant to criminal infiltration and equipped to minimise gambling harms,” Crawford said. “However, the NICC has requested a supplementary report from the manager to outline any additional matters arising from the article that are relevant to The Star’s NSW operations.”
These issues are separate to the auditors’ issues with Star, which rest on whether the group is capable of paying the impending fine from the financial crimes watchdog, Austrac.
Star argued that a fine of more than $100 million may be beyond its financial means. Austrac argued a fine of about $400 million was commensurate with Star’s wrongdoing. A court judgment on the fine could be handed down in September.
Star’s auditors signalled the material uncertainty on its ability to pay its bills as they fall due over the next year, “including in respect of the AUSTRAC proceeding, where the group is reliant on the judgment of the court as to quantum and timing being within the groups’ capacity to pay, given its existing liquidity and ability to access any additional funding required”.
Star chairman Soo Kim, who is chair of casino operator Bally’s – which injected hundreds of millions of dollars along with the Mathieson family to help save Star – acknowledged the tough task they still faced.
“While we are no strangers to casino turnarounds, The Star is one of the most complex challenges we have encountered,” he said in the chairman’s message to investors in the annual report today.
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Colin Kruger is a senior business reporter for the Sydney Morning Herald and The Age.Connect via email.