Star Entertainment’s $1 Million Loss Leaves Sydney Exposed

Star Entertainment Group booked $266 million of revenue and a $1 million EBITDA loss in the March quarter as Sydney tables kept sliding. The unaudited print covers the three months to 31 March 2026 and reversed a $6 million profit in the December quarter that had included an $11 million Brisbane operator-fee true-up.

On 25 September 2026 the NSW Independent Casino Commission told the group the Sydney casino licence stays suspended, with regulator-appointed manager Nick Weeks extended to 30 June 2027.

A $1 Million Loss After a Padded December Profit

The group’s March quarter activities report, lodged with the ASX on 28 April 2026, put revenue 12% below the $301 million December quarter and 1% below the $268 million of the prior corresponding period. EBITDA, the earnings figure the company quotes before interest, tax, depreciation, amortisation and significant items, was a $1 million loss against a $6 million profit in December and a $24 million loss a year earlier, a 96% year-on-year improvement the company tied to cost savings and a higher Brisbane operator fee.

That December profit is the figure that made March look like a reversal. The company said the $6 million included an $11 million prior-period true-up of The Star Brisbane operator fee. Strip that true-up out of the comparison and March is a quieter quarter, not a collapse from profit. Operating expenses fell to $206 million from $230 million in December and $228 million a year earlier, an 11% sequential cut and a 10% year-on-year cut, or $24 million off the December run-rate against a $35 million drop in revenue.

THE MARCH QUARTER BY PROPERTY

Sydney was the drag. Gaming revenue there fell 10% on the year, “largely due to lower table games revenue,” the company said, with visits down and electronic gaming machines the offset. Gold Coast revenue slipped 6% on the December quarter on seasonal volumes but rose 5% on a cyclone-hit year-earlier period, with machines and hospitality carrying tables. The Brisbane fee line is not casino win; it is the operator fee Star recognises for running Queen’s Wharf. The December $26 million fee included the $11 million true-up, so the $15 million March fee sits on the same run-rate. Treasury Brisbane, closed as a casino on 25 August 2024, is now a hotel and car park.

The new leadership team, in place from December 2025, started cutting the corporate office in the quarter and said it was still looking at property admin and supplier spend. Going concern language stayed in the same filing: progress on the Brisbane joint-venture exit and a WhiteHawk refinance letter, and “material uncertainty” still on the ability to continue.

Sydney Tables Have Not Recovered From Carded Play

The March slump sits on a rule change, not a wet summer. Mandatory carded play and a $5,000 daily cash cap were rolled out across the full Sydney floor on 19 October 2024, after a first stage from 19 August 2024. Average daily revenue from that full rollout through 31 March 2026 was 20% below the four-week average just before the first stage. The June quarter update kept the same 20% gap through 30 June 2026. The hit did not fade with the calendar.

THE SYDNEY DAILY-REVENUE HIT

• Full-floor date: Carded play and the $5,000 cash cap covered the entire Sydney gaming floor from 19 October 2024.
• Daily revenue: Average daily revenue was down 20% through both 31 March 2026 and 30 June 2026 against the four weeks before 19 August 2024.
• Group tables: Full-year tables revenue was $343.5 million, down 14.0% on FY25, while slots rose 3.5% to $412.7 million.
• Sydney gaming: Property gaming revenue for FY26 was $499.8 million, down 9.1%, with tables the soft line and slots the offset.

For the year to 30 June 2026, The Star Sydney took in $621.3 million, down 9.3%, and recorded an EBITDA loss of $32.7 million against a $47.7 million loss the year before. Non-gaming revenue there was $117.4 million, down 9.8%, after the sale of The Star Sydney Event Centre and weaker restaurants and bars, partly offset by hotel occupancy. NSW table-game duty is already 20.25%, up from 17.91% from 1 July 2023, and rebate duty is 12.5%. A 35% extra levy still applies on Sydney gaming revenue above $1.125 billion in a year through 30 June 2030, a threshold the property did not approach on $499.8 million of gaming revenue.

John Koster is the new property chief executive in Sydney. Bruce Mathieson Jnr, group chief executive and managing director since December 2025, told shareholders in the annual report that returning to suitability “remains critical to our future” and that the work is being “increasingly embedded in how we operate every day.” The March quarter, and the year around it, show the product the floor can still sell: machines holding up, tables not.

The Gold Coast Is Carrying the Group

The same books that show Sydney in the red show the Gold Coast as the only owned casino that prints a profit. In the March quarter the property made $8 million of EBITDA on $101 million of revenue. Electronic gaming revenue there grew 5% on the prior year once the cyclone-hit period is excluded, and hospitality helped. Tables were soft, as in Sydney, but the mix was enough to keep the property in the black.

The June quarter then pulled away. Gold Coast revenue rose to $107 million, up 6% on March and 12% on the prior year, with gaming revenue up 21% as both tables and machines grew. Segment EBITDA after corporate allocation was $13 million against $8 million in March and $2 million a year earlier. For the full year the property delivered $420.0 million of revenue, up 2.3%, and $37.0 million of EBITDA, up 69.7%. Gaming revenue was $256.4 million, up 3.2%, with slots the main lift and tables still described as soft until the June quarter initiatives kicked in. Non-gaming was $158.0 million, roughly flat. Ameet Patel is property chief executive for the Gold Coast and Brisbane.

Brisbane is a fee business after 31 March 2026, when Star completed stage one of the joint-venture deal with Chow Tai Fook Enterprises and Far East Consortium and exited Destination Brisbane Consortium. That exit released the parent guarantee over Star’s 50% of DBC’s $1.4 billion debt facilities. The operator fee was $5.0 million a month from July 2025 to March 2026, then a fixed $18 million a year ($1.5 million a month) plus EBITDAM incentive fees from 1 April 2026, pending approvals. FY26 operator-fee revenue was $59.7 million, more than double the $29.6 million of FY25, and the Brisbane segment still lost $20.4 million after allocated costs. Stage two, including Destination Gold Coast Consortium consolidation and the Treasury hotel and car park sale, is aimed at no later than 31 March 2027.

Group normalised revenue for FY26 was $1,101.0 million, down 2.2% from $1,125.2 million. Normalised EBITDA improved from a $76.2 million loss to a $16.1 million loss. Statutory revenue was $1,306.2 million, including $205.2 million of contracted DBC cost recovery. The statutory net loss was $307.3 million against $427.9 million in FY25. No dividend was declared. The group employs more than 7,000 people.

Cash Fell $40 Million Before WhiteHawk Arrived

Available cash at 31 March 2026 was $90 million, down from $130 million at 31 December 2025. That $90 million is $120 million of cash and cash equivalents less $30 million of cage cash on the floor. Total cash and deposits were $180 million including $60 million of restricted balances. The $40 million decline sat on a seasonally weaker quarter and ongoing restructure costs, with the senior facility still in place and a 31 December 2025 covenant waiver that required a refinance commitment by 31 March 2026 and a completed refinance by 15 May 2026.

THE CASH AND DEBT CLOCK

1. 31 December 2025: Available cash stands at $130 million as the December quarter closes with a $6 million EBITDA profit that includes the $11 million fee true-up.
2. 27 March 2026: Star signs a binding commitment letter with funds associated with WhiteHawk Capital Partners to refinance group debt in full and add liquidity.
3. 31 March 2026: Available cash is $90 million. Stage one of the Brisbane joint-venture exit completes and the $1.4 billion DBC guarantee is released.
4. 7 May 2026: The US$390 million (about A$540 million) WhiteHawk facility reaches financial close, due May 2029, and the old syndicated facility is repaid.
5. 30 June 2026: Cash and cash equivalents are $267.1 million, with a further $100.5 million of restricted deposits, for $367.6 million in total.
6. 31 July 2026: Cash and cash equivalents have fallen to $192.4 million, which the annual report says is not enough to cover net current liabilities.

The 7 May facility is a three-year US$390 million term loan at Term SOFR plus a 10% margin, with quarterly amortisation from 31 March 2027, a minimum asset-coverage ratio of 1.40 times first tested on 31 December 2026, and a minimum EBITDA covenant from 31 March 2027. Liquidity floors start at A$50 million for the first 12 months, then A$75 million, then A$100 million. An interest-reserve account was funded with the first 12 months of interest ($68.8 million of the restricted pile). After that reserve, the refinance added additional liquidity of about A$130 million.

Soo Kim, chairman since December 2025, wrote that the group had refinanced, exited DBC, and that “monthly revenues are no longer declining year-on-year and the business is cash flow positive for the first time in years.” He also called Star “one of the most complex challenges we have encountered” and said the work was “far from complete.” Bally’s and Investment Holdings finished a $300 million strategic investment in the year, including a final $66.7 million from Bally’s on 9 October 2025 and conversion of notes into 3.75 billion ordinary shares on 28 November 2025. The share price at 30 June 2026 was $0.09, against $0.14 a year earlier and $2.79 at the end of FY22.

Why the NSW Commission Still Will Not Hand Back the Licence

The Sydney licence has been suspended since 21 October 2022. The casino stays open. Net earnings still flow to Star after the manager’s costs. What the group does not hold is the right to run the floor in its own name. On 25 September 2026 it told the ASX the NICC had advised that the Sydney casino licence will remain suspended and that Weeks’s appointment runs to 30 June 2027 unless the commission ends it earlier. The Minister for Gaming and Racing amended the Casino Control Regulation 2019 at the NICC’s request so Weeks keeps holding the licence for The Star Pty Limited.

That is another extension in a chain. On 31 March 2026, the last day of the loss-making quarter, the NICC had already kept the suspension in place and moved Weeks’s term to 30 September 2026. Star had written on 23 January 2026 that it did not intend to seek a licence determination that March, and its 12 March 2026 pathway-to-suitability paper said the same. The commission used those letters as the basis for leaving the suspension on. In April the NICC had separately asked the government to extend the term of The Star’s manager so the floor could keep operating while the licence stayed parked.

Philip Crawford is chief commissioner of the NICC. His statement attached to the 25 September filing is the clearest account of why the March numbers still sit under a special manager.

There is no doubt that The Star has come a long way in addressing the matters which led to the suspension of its casino licence in 2022. However, recent allegations regarding governance, leadership, and culture at the casino are serious and are being treated as such by both the manager and the NICC. It is disappointing that despite the progress made by the Sydney casino, the Group company continues to experience problems that affect each of its properties.

Philip Crawford, Chief Commissioner, NSW Independent Casino Commission

Crawford said both Star and the listed parent must show they have “learned from past mistakes” and can fix cultural issues without the commission stepping in, and that it is Star’s job to prove the remediation “sticks long-term.” He flagged the AUSTRAC civil case still before the Federal Court and “uncertainty about The Star Entertainment Group’s capacity to support The Star’s remediation while it fills critical leadership and governance roles.” The suspension can be lifted at any time, he said, if the casino shows the work is “properly embedded.”

Queensland moved the day before. On 24 September 2026 the group lodged an ASX notice that the Gold Coast licence suspension had been deferred to 31 March 2027, keeping a special manager in place there as well. NSW and Queensland, in the same 24 hours, locked both casinos under outside managers into 2027. The March quarter’s Sydney miss reads less like a seasonal dip against that calendar, and more like the run-rate of a group that still does not hold its own licences.

AUSTRAC and the Going-Concern Warning

Ernst & Young’s audit report on the FY26 accounts includes material uncertainties on going concern and an emphasis of matter on regulatory and legal provisions. At 30 June 2026 the group had a net current liability position of $222.3 million. Current liabilities include a provision for the directors’ estimate of the AUSTRAC outcome. The civil penalty hearing was heard in June 2025 after the parties resolved the facts. AUSTRAC submitted that a $400 million penalty would be appropriate. The group submitted that a penalty of more than $100 million, payable in the following 12 months, would be challenging on available liquidity, including equity markets. Judgment was still outstanding when the annual report was lodged on 31 August 2026, and it was still outstanding in the 25 September licence update. The provision is on the balance sheet; the company says the actual penalty “may differ materially.”

Cash and cash equivalents of $192.4 million at 31 July 2026, the annual report says, are “insufficient to meet the net current liabilities,” so the group “may be required to source and access additional capital.” Directors still found reasonable grounds to treat the group as a going concern, provided the AUSTRAC bill and other contingencies are not so large or so soon that the group cannot pay its debts, and provided planned initiatives are executed. Operating expenses for the year were $860.4 million, down 7.9%, and the company said 2H slots growth plus the thinner corporate office will show more fully in FY27. Significant items after tax were $144.3 million, including a GST and withholding-tax settlement with the Commissioner of Taxation (Star had paid $88.3 million and is to receive a $33.4 million refund), restructure costs, regulatory and legal spend, refinance costs and joint-venture costs.

MATERIAL UNCERTAINTIES STILL OPEN

• AUSTRAC penalty: The Federal Court has not handed down the civil fine, with AUSTRAC arguing for $400 million and the group saying more than $100 million due within a year would strain liquidity.
• Working-capital gap: Net current liabilities were $222.3 million at 30 June 2026, against $192.4 million of cash and cash equivalents at 31 July 2026.
• Sydney licence: Weeks holds the licence through 30 June 2027, and Crawford has tied any lift to governance, leadership, culture, the AUSTRAC outcome and filling senior roles.
• Gold Coast overlay: Queensland’s deferred suspension now runs to 31 March 2027, so both owned casinos remain under external managers.

Cost cuts turned a $24 million year-earlier March loss into a $1 million loss, and they turned a $76.2 million full-year EBITDA loss into a $16.1 million loss. They did not bring Sydney tables back, and they did not persuade NSW to return the licence. Weeks will keep holding that licence until 30 June 2027 unless the commission ends the appointment earlier.

Disclaimer: This article is news reporting and analysis of The Star Entertainment Group’s public ASX filings and regulator statements, and it is for information only. It is not investment advice, a recommendation to buy or sell SGR shares, a credit opinion on the WhiteHawk facility, or a prediction of the AUSTRAC penalty or any licence decision. Readers who are considering an investment, a trade, or any other financial step tied to these figures should speak with a licensed Australian financial adviser or stockbroker who can weigh their own circumstances. Revenue, earnings, cash, debt terms, licence dates and court positions are those published by the company and the NICC as at the dates of the cited documents and may change when later filings, judgments or regulatory notices are released.