• The Star shut down its poker machines and electronic table games in three casinos due to system issues on Monday.
  • The shutdown will hit The Star’s revenues, with the company’s shares dropping 2.55% at the open to $0.50 by midday trading.

OUR TAKE
The nature of the system performance issues identified by The Star during the upgrade raises concerns about the thoroughness of its testing phase. The shutdown highlights the potential risks of large-scale system upgrades in the casino industry, where smooth operation is paramount.
–Elodie Qian, BTW reporter

What happened

Star Entertainment has shut down its poker machines and electronic table games in three casinos due to a system outage caused by a performance issue on Monday, resulting a drop in its share price.

Star’s system upgrades at three casinos, The Treasury Brisbane, The Star Gold Coast and The Star Sydney, are designed to improve the company’s transition to cashless gaming, and the upgrades revealed performance issues with electronic gaming machines.

All affected gaming machines were shut down on 13 July at 10 p.m. Star worked with its external provider, Konami, to find a solution. “The decision was taken by The Star to ensure compliance with relevant regulations and to maintain the company’s commitment to safer gambling procedures,” Star said.

It said, “Treasury Brisbane, The Star Gold Coast and The Star Sydney remain open with table games, restaurants, bars and entertainment available.”

The shutdown will hit The Star’s revenues, with the company’s shares dropping 2.55% at the open to $0.50 by midday trading, costing Star about $40 million of its $1.45 billion market capitalisation. Over the past 12 months, its share price has fallen 48.78%.

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Why it’s important

In New South Wales, The Star has been asked to make all gaming machines cashless by 30 August.

The shutdown is bad news for Star Entertainment, which has been facing investigations by corporate regulators and penalties for serious operational failures for years.

In October 2022, the Independent Casino Commission of New South Wales (NSW) fined The Star A$100 million (US$636 million) after finding that The Star had allowed money laundering to take place at its Sydney casino.

“The Star offered free alcohol to VIPs as an inducement to gamble and allowed vulnerable patrons to gamble continuously for more than 24 hours at a time, without intervention,” chief commissioner of NSW Independent Casino Commission, Philip Crawford said.

The Star also faced declining revenues. The Star’s stock fluctuated throughout the year, and its earnings declined as it faced cost-of-living pressures and a shrinking market for high-end games.

“Current trading conditions reflect the challenging economic environment and cost-of-living pressures,” the company said at the time.