Star Entertainment Cuts FY26 Loss as July Revenue Improves

Star Entertainment Group reported a narrower statutory loss for the year ended June 30, 2026, while its Australian casino venues recorded improved revenue in July, offering an early indication of firmer trading after a weak March quarter. The result matters for the group’s financial recovery because it remains subject to significant regulatory, licensing and liquidity pressures, including potential anti-money-laundering penalties and continued scrutiny of its suitability to operate in New South Wales.

The casino operator posted a statutory net loss of AU$307.3 million for FY26, compared with a loss of AU$428 million in the previous financial year. Its normalized EBITDA loss narrowed to AU$16.1 million from AU$76 million in FY25, reflecting lower central costs and operational changes across the business, although the group remained loss-making on that measure.

Normalized revenue fell 2.2% to AU$1.1 billion over the financial year. The decline shows that the company’s cost programme has progressed more quickly than its revenue recovery. Management said trading conditions reached their weakest point during the third quarter, before customer and marketing initiatives were adjusted in subsequent months.

July revenue across The Star Sydney and The Star Gold Coast reached AU$92.4 million, up 6% from the same month a year earlier and 8% above the average recorded during the fourth quarter of FY26. Gaming machine activity was the principal contributor to the improvement, according to the group.

Star said group-wide July revenue was 12% above the level seen in the March 2026 quarter, which represented the low point in recent trading. If that performance is maintained through the current quarter, average monthly revenue could be the highest since the second quarter of FY25. However, a single month of improved revenue does not resolve the longer-term decline in the Sydney business or remove the need for further expense reductions.

The Sydney property remained the group’s principal operational challenge during FY26. Gaming revenue at The Star Sydney fell 9.1% year on year to AU$499.8 million, while property EBITDA declined 30.6% to AU$63.7 million. The venue has been affected by weaker table-game revenue as well as gambling reforms and higher compliance requirements in New South Wales.

Those measures include mandatory carded play and restrictions on cash use, which have altered the operating environment for casino customers and increased the compliance burden on the licence holder. Such reforms can affect revenue patterns by reducing cash-based gambling activity and requiring operators to invest in customer identification, transaction monitoring and responsible gambling systems.

For Star, the Sydney regulatory environment has implications beyond short-term earnings. The company identified a return to licence suitability in the state as one of the factors central to its financial outlook. Casino suitability assessments examine whether an operator has the governance, compliance systems, financial standing and management arrangements required to hold a licence. A failure to satisfy regulatory expectations could restrict market access or lead to additional operating conditions.

The Star Gold Coast produced a more stable result. Gaming revenue at the Queensland venue increased 3.2% to AU$256.4 million during FY26, supported by gaming machine performance. Property EBITDA rose 0.3% to AU$79.8 million. Although the growth was limited, the Gold Coast operation provided a partial offset to the weaker performance in Sydney.

The differing results at the two properties underline the extent to which state-based rules, customer behaviour and product mix influence the group’s performance. Gaming machines supported both the July improvement and the Gold Coast result, while table-game activity remained a drag on the Sydney venue. That creates a concentration risk for the operator, particularly where tighter regulatory controls affect the property that has historically generated the larger share of gaming revenue.

Central cost reductions were a major factor in the reduced EBITDA loss. Star said it reviewed its organisational structure, business model and wider strategy during the year, including a reduction in the size of its corporate office. Group corporate costs fell 38% to AU$178 million. The savings have helped narrow losses, but the company will need to demonstrate that it can maintain controls over spending without undermining its capacity to meet heightened regulatory and risk-management obligations.

The group’s ownership and financing position also changed during the period. Bally’s Corp and Investment Holdings Pty Ltd acquired a controlling interest in Star in November 2025, in a transaction intended to support a turnaround at the Australian operator. The arrival of new controlling shareholders has coincided with changes to the company’s management approach and efforts to strengthen its funding position.

Star said it had moved towards a property-led operating model, with responsibility more closely focused on venue performance, customer activity and responsible operations. Group chief executive and managing director Bruce Mathieson Jnr said the revised structure was designed to increase accountability across the business. Chief financial officer and interim group chief risk officer Charles Diao said financing and strategic transactions, together with operational changes, had strengthened the company’s financial and risk position.

The company also received revenue from its Brisbane arrangements. It generated AU$59.7 million in operator fee revenue from The Star Brisbane during FY26. That amount included AU$10.2 million that had been held in escrow and was released in March after completion of the first stage of a joint-venture transaction involving the sale of Star’s 50% stake to its Hong Kong partners.

Following that transaction, Star is receiving AU$4.5 million per month to operate The Star Brisbane. The arrangement gives the group an ongoing source of operator fee income while reducing its ownership exposure to the development. However, the fee structure also means that Star’s financial outcome from Brisbane differs from the direct property revenue and EBITDA it reports at Sydney and the Gold Coast.

Despite the reduced annual loss, July revenue growth and lower corporate costs, the company continued to warn of material uncertainty over its ability to continue as a going concern. This is a significant qualification for investors, creditors, suppliers and regulators because it indicates that Star’s financial position remains dependent on developments that are not fully within its control.

Among the key risks identified by the group is a potential penalty from AUSTRAC relating to historical failures in anti-money-laundering compliance. AUSTRAC is Australia’s financial intelligence agency and supervises compliance with anti-money-laundering and counter-terrorism financing requirements. A financial penalty or further remediation requirements could place additional pressure on liquidity, depending on the amount, payment terms and any associated operating commitments.

The group also cited the need for revenue growth and further cost savings. While July produced a positive comparison with the March quarter and the prior year, Star has not indicated that a sustained recovery has been achieved. Consumer demand, regulatory restrictions, competition for discretionary spending and changes in casino customer behaviour may all affect whether the recent momentum continues.

The FY26 figures illustrate a business that has reduced its losses but has not yet restored profitability or removed its regulatory overhang. The Sydney venue remains exposed to an evolving compliance framework, while the company’s financial recovery depends on a combination of trading performance, expense control, financing arrangements and regulatory outcomes. Cost reductions alone may have limited benefit if revenues remain under pressure or if compliance spending increases.

Star’s next focus will be sustaining the July trading improvement through the current quarter, delivering planned savings and managing its regulatory obligations. The market will also monitor progress on the Sydney licence suitability process, any AUSTRAC enforcement outcome and the group’s ability to maintain sufficient liquidity as its revised operating model is implemented.