The inability of Star Entertainment to adhere to gaming and financial regulations in Australia has brought about changes to casino oversight across the country. Queensland is now adding its name to the list of states making sweeping changes, with gamblers set to pay the price for Star’s negligence.
The Queensland Government wants to implement stringent new laws aimed at enhancing oversight and fortifying the integrity of casinos in the state. The reforms, delineated in The Casino Control and Other Legislation Amendment Bill 2023, will actualize all the recommendations put forth in the comprehensive review of the Queensland operations of Star.
This legislation introduces measures such as mandatory carded play within Queensland casinos and limitations on cash usage. It will also allow for the enforcement of mandatory pre-commitment with binding expenditure limits and designated breaks in gameplay.
Star Triggers a Gaming Paradigm Shift
As a result of these changes, casinos will be compelled to adopt new technologies, and stricter penalties will be imposed for specific violations. That could mean that casino operators will have to alter promos and incentives in order to cover the costs.
Legal adjustments from 2022 imposed financial penalties of up to AUD100 million (US$63 million) on casinos and were subsequently used in disciplinary actions against The Star. Now, this bill represents a proactive response to the independent review’s 12 recommendations.
Those recommendations, initially endorsed by the government in principle, are now being actively implemented. The Palaszczuk Government is confident this will ensure a more robust regulatory framework for the state’s casino industry.
Queensland currently has four casinos, including two Star properties, The Reef in Cairns and The Ville in Townsville. One of Star’s properties, Treasury Brisbane, will disappear once it finishes construction of its new casino at Queen’s Wharf.
The bill is now in the hands of Parliament, which will begin reviewing the myriad of changes. There hasn’t been a lot of information about the proposed gambling limits and other restrictions, although they’ll likely be a huge focus during consultations.
Star Investors Go Soft
The announcement sent ripples through the investor community, particularly impacting Star Entertainment. Despite the government’s efforts to bolster scrutiny and integrity in casinos through the reforms, Star investors expressed skepticism.
This has led to a significant drop in the company’s stock price. The uncertainty surrounding the implications of the reforms has left investors apprehensive about the potential impact on the company’s operations and profitability.
In the wake of the legislative shake-up, Star Entertainment’s stock price on the Australian Securities Exchange hit a new low. It started 2023 at AUD1.55 (US$0.98) and has continued to fall since then. As of this morning, the price was AUD0.60 (US$0.38).
The market’s skittish response underscores the challenges and concerns faced by companies operating in industries subject to regulatory changes. The coming days will see analysts and investors seeking clarity on how Star plans to navigate and adapt to the evolving regulatory landscape in Queensland.
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