High Roller Winning Streak Puts a Dent in The Star’s Profits
The Star Casino in Sydney has reported a drop of $80 million in profits for the second half of 2015 due to an unusually high win rate by six high rollers at the casino. The six players experienced an incredibly lucky win which chief executive Matt Bekier described as a “freakish” statistical event.
The six VIPs were playing high roller baccarat at $500,000 a hand when they experienced their run with luck. And their luck turned into bad luck for The Star Entertainment Group whose net profits dropped 37.9 percent, as opposed to their expected rise of 26.1 percent to $142 million. The business model for the casino allows for a $1.43 win off every $100 in bets that high rollers place; however this has dropped to 88 cents of late.
“We’ve looked at it every which way,” said Bekier. “We’ve looked at the distribution of bets, we’ve looked at the players, we looked at who won, we understood the lifetime history of the players that won – and it’s just bad luck.”
However, Bekier remains positive, believing that the casino’s luck will turn in due course.
“Bad luck and good luck are not sustainable so this will normalise,” he stated.
Bekier said that putting aside the win rate against the high rollers, the group’s properties, which include Jupiter’s Hotel and Casino on the Gold Coast and the Treasury Casino in Brisbane, had performed well. The domestic gaming business generated increased revenue, while International business increased in line with expectations.
The group is planning a $1 billion redevelopment for The Star complex in Sydney, $850 million in developments on the Gold Coast Jupiter’s complex and a new $3 billion casino and resort complex in Brisbane which will replace their Treasury Casino.
April 16, 2017