SBC News Voice of the Sports Betting Industry
Struggling Australian casino company The Star Entertainment Group has secured a financial lifeline with Bally’s Corporation, one of the biggest betting and gaming conglomerates in the US.
Bally’s has invested AUS$300m (US$187m/€166.2m) into the company, which runs large casino resorts in Sydney, Brisbane and the Gold Coast. On top of the investment, Bally’s has partnered with the firm with the intention of revitalising its business.
The Las Vegas-based company believes that its track record on fixing underperforming casino businesses will prove valuable to The Star, which has been struggling with regards to both finances and regulation for some time.
One of its more recent financial reports, for example, showed a 10.2% year-over-year decline in revenue for the 2024 financial year, ending June 2024. This decline in revenue in turn drove a significant drop in EBITDA of 45%.
Bally’s summarised that the objectives of the transaction are to preserve the long-term potential of The Star as a major casino enterprise and one of Australia’s biggest gaming stakeholders. The US stated that it will work collaboratively with both regulators and stakeholders to achieve this.
Soo Kim, Chairman of Bally’s, said: “This transaction provides Bally’s the opportunity to infuse The Star with what it needs to regain its position as Australia’s preeminent gaming destination.
“And it allows The Star shareholders to share in what we confidently believe will be a brighter future together.”
Second chance
The agreement throws The Star a major lifeline, as noted above, in the context of the significant financial and regulatory hurdles the firm has been facing. In the case of regulation, the company’s shares were suspended from the ASX earlier this year after it failed to submit financial reports in time.
In Bally’s case, the agreement extends the company’s reach beyond its founding market of the US.
This may come as a result of the company wishing to diversify its geographic revenue streams due to the rigid competition in the US, where it finds itself going up against the likes of Flutter Entertainment’s market leading FanDuel, second placed DraftKings and third placed BetMGM.
Expanding its presence in Australia, Bally’s is gaining a foothold in one of the world’s most valuable markets but also, like the US, a highly competitive one dominated by legacy operators like Tabcorp, Sportsbet and Ladbrokes Australia, along with newcomer challenger brands like BlueBet/Betr.
Australia is also a market undergoing substantial regulatory change at both the state and federal level. The government of PM Anthony Albanese in Canberra has either already made moves or hinted at making moves around responsible gambling and advertising, while the AUSTRAC regulator has also been firmly focused on anti-money laundering infractions in the gaming space of late.
