Pubs and clubs smash Star casino”

The Star Entertainment Group confirmed it was almost down to its last dollar when US casino group Bally’s injected $100 million as part of a rescue deal last week.

But Star’s business remains under threat with revenue continuing to decline across all three of its properties in the March quarter as casino reforms blunted its competitiveness. This includes the uneven pokies playing field in Sydney that drove customers to pubs and clubs, which don’t have ID checks and bans on cash gambling.

Revenue declined more than $200 million for the half year to $650 million compared with the prior December half, but it was the March quarter performance that confirmed that Star was losing market share to pubs and clubs, which are not subject to the card-based, know-your-customer requirements that are being implemented across Star’s casinos.

Star said that revenue plunged 25 per cent for the December half-year “reflecting challenging trading conditions due to the implementation of casino operating reforms [including mandatory carded play and cash limits which were implemented at The Star Sydney last year] and further loss of market share”.

It said this created “an uneven competitive environment with pubs and clubs, which continues to negatively impact on operating performance”. Mandatory carded play reforms are being introduced in Queensland this year.

Star chief executive Steve McCann told investors on a conference call, after the results were released, that Star’s financial peril has also affected customer numbers.

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“Clearly our performance continues to be very challenged as we navigate to a very difficult trading environment,” McCann said.

“The ongoing impact of regulatory reforms, the impact of mandatory carded play, cash limits, time limits, and our loss of market share across the Sydney and Gold Coast properties has had a material impact on the business, and we are continuing to operate through very challenging conditions.”