Billionaire’s Bailout: How Star Was Saved

A $300 million emergency funding deal aims to rescue struggling casino group Star Entertainment, but it may come at the cost of full management control and sets up a high-stakes turnaround challenge. The plan, led by US casino investor Bally’s and Australian hospitality giants, looks to stabilise Star’s finances while rewriting its leadership playbook.

Star Entertainment had been operating under extreme pressure for months, with mounting debts, poor financial results, and regulatory setbacks putting its future at risk. The casino operator, behind venues in Sydney, the Gold Coast, and the new Queen’s Wharf in Brisbane, had failed to secure previous equity raising attempts and was burning through funds fast. Faced with imminent administration, it turned to a last-resort partnership with international suitors.

A key figure in the deal is the chairman of Bally’s, who began eyeing Star in 2023 but declined to get involved without a controlling stake. His interest revived earlier this year when he personally conducted due diligence, visiting casinos in Sydney, Brisbane, and the Gold Coast. After connecting with Star’s largest shareholder over a strategic dinner, both parties saw shared potential in a revival. The deal was later sealed following a series of behind-the-scenes meetings and rapid negotiations, just as Star’s board ran out of other viable options.

The bailout includes a mix of immediate cash and a broader $750 million refinancing led by Australian developers, designed to provide breathing room. Management control would shift if the equity portion goes through, which would give the rescue duo a 56 percent stake in the company. That values Star at around $540 million, down from nearly $4.5 billion just four years ago.

This lifeline looks to reset Star’s troubled finances and leadership, but there are still looming risks. The company faces ongoing regulatory scrutiny, a likely fine for past conduct, and shareholder class actions, while competitive threats from pubs and rival casinos persist. Bally’s is also stretching itself, with its own $1 billion valuation tied up in 19 casinos across the US and a major Las Vegas resort under construction.

Support from lenders and a vision for operational turnaround give Star a cautious path forward, but with minimal room for error. The deal marks a bold bet on leadership and timing.

Source: The Australian, CapitalBrief, Forbes.