Three Star Entertainment Executives Step Down
Star Entertainment is following in the footsteps of rivals Crown Resorts as it bids to save its operating licence. The casino operator faces losing its New South Wales licence but hopes removing executives from its board will allow Star Sydney to continue operating.
Chief Executive Officer Matt Bekier resigned in March after admitting the casino’s failings fell at his door. Three more Star executives are heading to the job centre after resigning from their posts.
Chief Legal & Risk Officer and Company Secretary Paula Martin is out of a job. As are Chief Casino Officer (NSW) Greg Hawkins and Chief Financial Officer Harry Theodore. The trio acknowledged their role in Star’s recent mismanagement. Star announced the executives departure to the Australian Securities Exchange (ASX).
“The Star Entertainment Group Limited advises that it has received and accepted the resignations of Mr Harry Theodore, Chief Financial Officer, Mr Greg Hawkins, Chief Casino Officer (NSW), and Ms Paula Martin, Chief Legal & Risk and Company Secretary.”
“The three executives will work with the Executive Chairman to transition their executive responsibilities in an orderly manner. An executive search firm will commence the search for permanent appointments.”
“Ms Jennie Yuen, who was appointed and announced as Company Secretary on July 29, 2021, will continue in that role. The Star also refers to its announcement of April 1, 2022, where the board acknowledged the need for accelerated board change.”
Removal of Executives May Spare Star
Bekier threw the outgoing executives under the bus when he took the stand in the NSW inquiry last week. The former CEO pulled no punches, claiming the trio kept him in the dark about the mess going on behind the scenes at Star Entertainment.
Crown Resorts made similar moves in the run up to learning its fate. Crown faced losing its operating licences after major failings within the company. Indeed, the inquiry found Crown unfit to hold a gaming licence in Melbourne. However, the removal of key executives was part of the reason Crown continues operating. Star is hopeful of a similar outcome when its inquiry concludes.
Star Suspends Player Rebates
Star’s players will not feel the effects of the three executives resigning but a change of policy has the potential to hit them hard. Star Entertainment has suspended all domestic and international rebate play programs. In addition, it reconfirmed the casino does not use junkets to attract high-value players.
Rebate programs make it possible for players to convert rewards into cash used for gambling. They are particularly attractive to high rollers and high volume players. All rebate programs are suspended until further notice.
“The board has resolved to immediately suspend rebate programs for both domestic and international players across all its casinos until further notice. The Star will work with gaming regulators to address various identified risks as part of ongoing reviews of systems and processes.”
Star confirmed it ended all junket programs in October 2022. Furthermore, it does not envisage the rebate program cancellations to have any material impact on earnings during the FY22.
Star Shares Continue Falling
Investors in Star have their fingers crossed that the NSW government allows Star to continue operations. Shares in Star continue falling and are available at $3.01 each, at the time of writing. The same shares cost $4.20 per share 12-months ago, although they peaked at $4.60 in early October. The company has lost 21% of its value over the past six months.
Star’s investors launched a class action lawsuit in March. The lawsuit, which is for an undefined amount, revolves around Star executives mismanaging the company and bringing inquiries against it. Those inquiries and the negative press surrounding the company wiped off $1 billion of the company’s value.
The casino plans to defend itself against the lawsuit.
