The Star Swings to A$12m EBITDA Profit as Chair Faults Its Treatment of VIPs

The Star Entertainment Group made an EBITDA profit of A$12 million in the September quarter, and its chair told shareholders the way it treats VIP customers is its biggest problem. The numbers land as the group waits on a Federal Court penalty in AUSTRAC's money laundering case.

• The Star Entertainment Group reported Group EBITDA of A$12 million, about $8.4 million, for the September 2026 quarter, against a loss of A$13 million a year earlier, on revenue of A$284 million
• The company says operating free cash flow excluding one-off items was positive, but its Appendix 4C shows a net operating cash outflow of A$15.5 million and cash falling to A$239 million
• Chair Soo Kim told the annual general meeting he was "mystified, horrified" by how The Star treats its VIPs and blamed the company's execution of the rules, not the rules, AAP reports
• The Sydney licence remains suspended, with the manager's term extended to 30 June 2027, and the Gold Coast suspension is deferred to 31 March 2027
• Shareholders passed every resolution, including share issues to Bally's and Investment Holdings, with the AUSTRAC penalty ruling reportedly due on 28 October

The Owned Casinos Drive a A$25 Million Swing in Quarterly EBITDA

The Star Entertainment Group (ASX: SGR) reported Group EBITDA of A$12 million, about $8.4 million, for the quarter to 30 September 2026, according to its unaudited quarterly activities report of 27 October. That compares with losses of A$13 million a year earlier and A$9 million in the June quarter. Revenue was A$284 million (about $199 million), up 2% on the year, while operating expenses fell 12% to A$202 million. All figures are before significant items.

The Star Sydney and The Star Gold Coast, the two casinos the group owns in Australia, lifted combined revenue 5% to A$279 million, which the company calls its first year-on-year quarterly growth since quarterly reporting began in September 2024. Sydney's EBITDA rose to A$15 million from A$3 million and the Gold Coast's to A$20 million from A$11 million. The report credits marketing-driven gaming machine growth and notes soft table games in Sydney. Unallocated corporate costs fell 29% to A$23 million. The Star Brisbane, which the group now only manages after exiting its joint venture there in March, posted record EBITDAM of A$37 million, but The Star's operator fee fell to A$4.5 million from A$13.8 million.

The Cash Flow Claim Rests on Excluding One-Off Items

Inside Asian Gaming reported the quarter as the first in more than two years in which The Star was both EBITDA and cash-flow positive. The company's wording is narrower: operating free cash flow excluding one-off items was positive, and FY27 is expected to bring its first net annual operating cash inflow before one-offs in more than two years. The Appendix 4C records net cash used in operating activities of A$15.5 million, about $10.8 million. The one-offs named are a payment of historically underpaid casino duties agreed with NSW Treasury, which is not quantified, and receipts from a tax settlement over payments to junket operators.

Cash and cash equivalents fell to A$239 million, about $167 million, from A$267 million at 30 June. Debt is a $390 million WhiteHawk Capital term loan due May 2029, plus an A$11.6 million payment-in-kind liability to Bally's and Investment Holdings. The report repeats that material uncertainties over the group's ability to continue as a going concern remain.

The Chair Says The Star Is Mishandling Its Own VIPs

At the meeting, a shareholder criticised how long know-your-customer (KYC) and source-of-wealth checks on premium players take, Australian Associated Press (AAP) reports. Chair Soo Kim, who also chairs Bally's Corporation, replied: "I continue to be mystified, horrified by how we've been treating our VIPs of late." He called it the group's "No. 1 problem, but also No. 1 opportunity", said many VIPs cannot get through enhanced due diligence and play at Crown instead, and added: "I would think that it's our execution of the rules that is incorrect."

Kim's written address says The Star has embraced NSW and Queensland standards on anti-money laundering, KYC and safer gambling, "the highest in the industry", and that "the excesses of the past are in the past". Group Chief Executive Bruce Mathieson Jnr said momentum continued in October and that more than 85% of remediation plan milestones are complete. Star has blamed mandatory carded play and A$5,000 cash limits at The Star Sydney, imposed on 19 October 2024, for a 20% fall in average daily revenue, according to AAP.

Every Resolution Passed With the Regulatory Clocks Still Running

All ten resolutions passed on a poll, according to the meeting results. The remuneration report received 96.11% after a strike in 2024, ABC News notes, although proxies on it ran about 164.5 million against to 85.5 million for before roughly 4.07 billion direct votes carried it. That is close to the combined holdings of Bally's, about 38%, and Investment Holdings, which with Bruce Mathieson Snr controls about 23%, according to the notice of meeting.

The NSW Independent Casino Commission (NICC) kept Sydney's suspension in place on 25 September, weeks after signalling a return, citing "serious" allegations about governance, leadership and culture. The Australian Transaction Reports and Analysis Centre (AUSTRAC) sought a A$400 million penalty, about $280 million, at a June 2025 hearing, an amount Star says would push it into administration, according to AAP, which reports the Federal Court ruling is due on Wednesday.

The Profit Is Real, but the Cash Recovery Is Still a Forecast

The A$25 million EBITDA swing, driven by slot floors and lower corporate costs, is a genuine operating improvement. Statutory operating cash flow was negative, cash fell by A$27.6 million over the quarter, and the positive figure depends on adjustments the company does not fully quantify. The December 2025 quarter was also EBITDA-positive, at A$6 million, while recording an operating outflow of A$41.5 million. The half-year accounts will need to show the cash building management now promises.

Calling Compliance an Execution Failure Is a Calculated Pitch to Regulators

Kim's Crown comparison is pointed: if a rival can admit VIPs under the same rules, slow checks are a fixable process problem rather than a case against the rules. That lets The Star chase table-games revenue, which its report calls soft, without asking for lighter regulation. The risk is timing. A group whose licence was suspended over junket-era AML failures is publicly faulting its own due diligence as a drag on VIP business weeks after the NICC cited fresh culture concerns and a day before the AUSTRAC ruling. Faster checks that stay thorough would satisfy both sides; lighter ones would not.

Brisbane's Record Mostly Benefits Someone Else

The Star Brisbane's A$37 million EBITDAM is the group's best operating number, but since the joint venture exit The Star collects a fixed annual fee of A$18 million plus incentive fees. The group's own earnings now rest on Sydney and the Gold Coast.

The Star has shown it can grow revenue again under tighter rules. Whether it can win back high-value players without reopening the failures that cost it its Sydney licence is the question regulators and the court will now answer.