Star Entertainment, one of Australia’s largest casino operators, has struck a lifeline deal with U.S. gaming giant Bally’s Corporation, agreeing to a AU$300 million (US$180 million) rescue package that could hand over majority control of the struggling business.
The agreement, announced Monday via a filing to the Australian Securities Exchange, comes at a critical time for Star.
The operator has been under mounting financial pressure, grappling with regulatory fallout from money laundering investigations, plunging revenues, and an inability to file its half-year results due to funding uncertainty.
Under the terms of the provisional deal, Bally’s will inject AU$250 million into the business through a mix of convertible notes and subordinated debt, with an additional AU$50 million expected to come from Star’s largest shareholder, Bruce Mathieson.
If Mathieson’s investment proceeds as expected, Bally’s share of the deal would be reduced to AU$200 million.
The arrangement is expected to give Bally’s a controlling 50.1% stake in Star, pending regulatory approval and a shareholder vote scheduled for late June.
On a fully diluted basis, Bally’s could ultimately hold 56.7% of the company.
The first tranche of AU$100 million is due by Wednesday — funds Star badly needs to stay afloat.
CEO Steve McCann previously disclosed that the group was down to just AU$79 million in cash, with earlier bailout talks, including those with Salter Brothers and King Street Capital, falling through.
“This agreement offers the stability we need to push through a difficult period,” a person close to the deal said, pointing to Bally’s experience running 19 casinos across the United States.
Bally’s Chairman Soo Kim has previously said the company sees long-term strategic value in supporting Star’s venues in Sydney, Brisbane, and the Gold Coast.
As part of the restructuring, Star is also selling its 50% stake in Brisbane’s massive Queen’s Wharf development.
The AU$50 million deal with joint venture partners Chow Tai Fook Enterprises and Far East Consortium will be paid in cash and hotel interests.
If approved, this deal would reshape the ownership and future direction of Star Entertainment.
However, regulatory clearance is essential, and the company’s shares remain suspended from trading until a viable financial path forward is confirmed.
For now, Bally’s backing appears to be Star’s best bet.
Whether it’s enough to restore confidence in one of Australia’s most well-known gaming brands remains to be seen but at least it’s a step in the right direction for the somewhat floundering company.
