“It’s not a case of the more gambling you do, the more drinks you get. It is a benefit given to members of these rooms,” he said, rejecting speculation the move may result in a worsening of gambling harm.
Cooke dismissed concerns that rival Crown Resorts’ choice to close one of its gaming floors due to low customer uptake in Sydney suggested a bleak outlook for Star Sydney. Crown closing its Mahogany floor in Barangaroo and cutting 95 staff from its 2000-strong Sydney workforce was first reported by this masthead last week.
“We’re seeing a stabilisation of the Sydney business. I’m not intimately knowledgeable about Crown’s business but clearly there’s been competition between properties, but we’re actually seeing both our main gaming floors performing well,” he said.
It was a torrid year for The Star, marred by poor results for its flagship Pyrmont casino. Star Sydney’s earnings were impacted by operating restrictions, bolstered competition from rival Crown Resorts with the opening of its new casino in Barangaroo, and weaker consumer spending. The group’s Queensland properties offset the loss in Sydney during the first half of 2023, before demand there also eased off due to weaker domestic tourism in the region.
Cooke told investors on Tuesday that it would be an understatement to call fiscal 2023 challenging, but was optimistic 2024 would not repeat the multi-billion loss.
“The consequences flowing from the damage to our social licence are felt daily by team members at multiple levels, reinforcing the critical need to understand the privilege and responsibility that comes with holding a casino licence,” Cooke said.
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NSW gaming minister David Harris published a report following the independent review of The Star in NSW last year. The report said 22 of Adam Bell SC’s 30 recommendations have been implemented by the embattled casino, with eight still in progress.
The casino operator is still bracing to pay what’s expected to be a multimillion-dollar fine following an investigation by the government’s financial intelligence agency, AUSTRAC. Crown Resorts recently agreed to a $450 million penalty, or about 5 per cent of its listed market capitalisation.
Although this is one of the biggest penalties in corporate history, and would be the same size as Star Sydney’s total cost base, sources who were not authorised to speak publicly said Star had planned for a penalty of up to 10 per cent of its market capitalisation.
Cooke would not comment on the potential fine on Tuesday, besides saying he was comfortable with what the company has provided and does not expect talks with the regulator to start until 2024.
The Star’s share price closed 2 per cent stronger at 96 cents.
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