The Star Entertainment Group has finalized a binding pact with the New South Wales administration to ensure a minimum workforce at its Sydney establishments.
The Star Entertainment Group has also reached an accord with New South Wales Treasurer Daniel Mookhey to experiment with cashless and card-only gaming at its Sydney gambling house. This will serve as a prelude to changes being implemented in New South Wales later this year.
The employment guarantee agreement was sanctioned by the Star Entertainment Group, the New South Wales government and the United Workers Union. The Star Entertainment Group committed to maintaining a minimum number of workers and to preserving a specific ratio of full-time, part-time and temporary employees. The agreement will be in effect until June 30, 2030.
Under modifications to the Casino Control Act, the Star Entertainment Group will face penalties if it fails to fulfill its commitments. The employment commitments can be subject to certain permissible adjustments in some situations, including significant adverse change occurrences.
In August of the previous year, the Star Entertainment Group secured concessions from New South Wales on casino tax rates. Since then, the company has been formulating a transition strategy to stabilize its Sydney casino operations and curtail further reductions.
The Star Entertainment Group has also consented to trial cashless and card-only gaming at The Star Sydney.
Modifications to the New South Wales regulatory system will result in the introduction of cashless gambling and card-based gaming starting in August 2024. This pilot project serves as a precursor to the broader changes. The trial will encompass 51 slot machines and 8 gaming tables until the new framework takes effect.
Robbie Cook, CEO of Star Entertainment, commented on the formalization of the arrangement, stating: “Star Entertainment is thankful for the productive collaboration with the current New South Wales government, ultimately reaching an agreement that ensures job security for our dedicated and hard-working team members in Sydney.
“As we continue to strive to regain the trust of the community and implement the necessary changes to restore Star Entertainment’s suitability, we are also committed to remaining a significant contributor to the New South Wales economy.”
Star Entertainment reported a full-year loss of A$2.4 billion.
Last August, Star Entertainment announced a full-year loss of A$2.4 billion (EUR 1.6 billion/GBP 1.5 billion/USD 1.2 billion) as the company incorporated the cost of reducing the value of its casinos.
Star Entertainment faced a series of penalties and declared A$2.8 billion in expenses for the year, categorized as “major projects.”
These included a A$2.2 billion non-cash impairment of goodwill and property assets in Sydney, Gold Coast and Brisbane Treasury. There were also A$595 million in regulatory and legal expenses, A$54 million in debt restructuring expenses and A$16 million in redundancy expenses.
These expenses, excluding the positive EBITDA increase of A$317 million, led to a post-tax deficit of A$2.4 billion.
In September 2022, the New South Wales administration declared that Star Entertainment Group was not appropriate to possess a gambling permit. The investigation by Adam Bell SC discovered that Star Sydney Casino had a prolonged and severe history of failing to adhere to anti-money laundering and social responsibility rules. Twelve months later, an assessment of the advancements made by Star Sydney Casino revealed that the casino had put into practice 22 of the 30 actions suggested in the Bell report.
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