Star Entertainment is set to slash 500 jobs and freeze salaries following a plunge in its revenues across its casinos.
In a trading update provided to the stock exchange, the gambling giant, which owns casinos in , and the , revealed its earnings before tax were set to drop by $80million to $280million.
‘The group is experiencing a significant and rapid deteriorating in operating conditions, particularly at The Star Sydney and chungminhtaichinh Star Gold Coast,’ the company said.
The Star Casino group has announced they will cut 500 jobs and freeze wages (pictured The Star Casino on the Gold Coast)
‘This has largely been driven by the compounding impact of regulatory operating restrictions and exclusions, and by emerging weaknesses in consumer discretionary spending behaviour.’
Star said the 500 job losses from its 8,000 staff added to a freeze on wages and bonuses along with other cost cutting measures.
The casino hoped to cut $100million in expenditure for the next financial year.
‘The strong 1H FY23 performance at the Group’s Queensland properties as reported in February, which was driven by strong domestic revenues in that period (relative to pre-Covid levels, has deteriorated in recent weeks, particularly at the Gold Coast,’ the company said.
‘To put the operating environment into perspective, the group’s current earnings performance is at unprecedented low levels -excluding the Covid-19 period.
‘If these current conditions continue for the balance of the financial year and do not materially change, underlying FY23 EBITDA is expected to be in the order of $280 million to $310 million.’
Star Entertainment is going ahead with its planned sale of the Sheraton Grand Mirage on the Gold Coast.
It has also employed a consultancy firm to review operations at its Sydney casino.
In February The Star unveiled a net loss after tax of $1.3 billion for the December half of last year.
That included fines of more than $200 million following inquiries in Queensland and NSW last year, which both found Star ‘unfit’ to hold a licence.
The Star said the jobs cuts, wage freeze and other planned measures would cut $100million from its operating budget for the next financial year (pictured The Star Casino in Sydney)
The casino giant was also factored in another $150 million hit, which is expected to be levied by financial watchdog AUSTRAC.
In response to inquiries the casino group said it was willing to do ‘whatever necessary’ to restore legitimacy.
The company appointed a law firm as an independent monitor as it promised a cultural overhaul.
The inquiries came in response to media investigations that alleged Star casinos enabled suspected money laundering and large-scale fraud.
NSW watchdog the Independent Casino Commission appointed former NRL boss Nicholas Weeks as an independent special manager to oversee Star’s operations both in that state and in Queensland.
The Queensland government has threated to suspend Star’s gaming licence if the operator cannot demonstrate it has cleaned up its act by the end of this year.