As of late, things have not been looking good for Star Entertainment Group, an Australian gambling and entertainment company. Last December, Star Entertainment made online casino headlines by receiving a $67.92 million fine from New South Wales and Queensland. In turn, this has led to a deterioration in their casino operation. Now, Star Entertainment will Fire 500 Employees as they struggle with regulatory restrictions and low earnings.
In addition to cutting 500 jobs, Star Entertainment Group will also implement a salary and incentive freeze. Their goal is to extract $100 million from their operating costs after unprecedented low earnings from their casinos.
The announcement was made yesterday and includes a report that they will be trimming their annual earnings forecast. Thus, they now expect to post underlying earnings of between $280 million and $310 million for the year.
Star Entertainment will Fire 500 Employees due to Deteriorating Operating Conditions
Ever since the expose by Australian media outlets, for repeating rules violations Star Entertainment has been fighting a downhill battle. The latest is seen in having to fire 6 percent of their 8,000 employees work force. However, employees in union jobs will be safe from termination.
Star Entertainment said that they “experiencing a significant and rapid deterioration in operating conditions.” In addition, they said that this is particularly true at the Star Sydney and The Star Gold Coast.
The company acknowledges that the drop is the result of its past transgressions like money laundering, document forgery and more. However, they also blame changes in consumer spending for impacting its bottom line. According to the company this is also because of “an emerging weakness in consumer discretionary spending behavior.”
According to online gambling rumors, a company takeover from Pyrmont casino might be in their future. In the meanwhile, they will continue with the plan to sale the Sheraton Grand Mirage Resort for over $200m.
Since the announcement was made, the value of their shares went down by 11 percent. The company owns casinos in Sydney, Brisbane and the Gold Coast which are known for their live dealer casino games.
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