Casino grilled over funding partners
SHAREHOLDERS grilled The Star board at the Group’s annual general meeting on the Gold Coast yesterday on everything from executive incentives and smoking in the casino to punters rorting the rewards program.
CEO Matt Bekier said “very lucky” gamblers at The Star had beat the house at a far higher rate than expected in the past financial year, giving the casino operator a 19 per cent bruise to its earnings.
Shareholders were told The Star’s casinos retained 1.16 per cent of turnover – well below its 1.59 per cent win rate the previous year and short of the theoretical rate of 1.35 per cent.
“Best explained, some of our guests were very lucky,” Mr Bekier said. “It’s in the nature of business.”
Shareholders heard the CEO intends to stay in his role until 2024, when Brisbane’s Queens Wharf development is complete.
One man, Ian Timmins, garnered a round of applause from the room of about 100 fellow shareholders after criticising The Star’s $490 million private share placement with partners Chow Tai Fook and Far East Consortium.
“If they want a share, let them buy it on the open market. You’ve diluted the share of all other shareholdings by a significant amount,” he said.
“If the state of the company is as good as we are led to believe, there should have been no problem borrowing the money necessary.”
In a lengthy statement, Mr Timmins said the new casino rewards program “drives patrons crazy” and was being rorted by people swiping multiple cards and others taking advantage of food, drink and gaming promotions without spending any money.
He criticised the lack of separate smoking rooms for high rollers, saying the casino had promised the issue of smoky tables would be fixed in the $345 million revamp.
“The problem has improved, but players did not get what was promised,” he said.
“The company has misled shareholders and patrons for the past four years.”
Chairman John O’Neill said the company worked within smoking regulations and suggested the rewards program issue be taken offline.
He defended the private placement of shares, saying The Star had gained strategic benefits from the partnership beyond the injection of funds.
“They’re companies with a knowledge of Asia, their networks, their distribution channels, their experience in construction and development is of enormous value to The Star Entertainment Group, so we’re very comfortable with that.”
Another shareholder said he was surprised the company had allowed the new partners such significant holdings, asking if it made the company liable for a takeover.
Mr O’Neill said the partners currently held 9.9 per cent of the register. “They may, once they get approval and it passed a regulatory investigation … they’re at liberty to buy further shares on the market,” he said.
The Star reported in August its full-year profit had fallen by 44 per cent, despite record revenue, largely because of its low win rate, debt restructuring costs and expenses relating to the opening of The Darling at Broadbeach.
Revenue rose 5.5 per cent to $2.47 billion, as the money that international high-rollers brought to play with had risen 36.4 per cent to $4.7 billion, and turnover lifted 54.3 per cent to $61.2 billion. The casino operator declared a final dividend of 13 cents per share, up from 8.5 cents per share a year ago.