Australia’s second-largest casino operator, Star Entertainment Group, reported a reduced first-half loss on Friday, helped by lower operating costs and stronger seasonal trading in the second quarter of fiscal 2026.
The company posted a normalized loss of A$75.7 million for the six months ended December 31, compared with a loss of A$136 million a year earlier. The result also came in better than analysts’ expectations, which had forecast a loss of around A$108.6 million, according to Visible Alpha data.
Star said the improvement was largely driven by an 11% decline in operating expenses, reflecting reduced volume-related costs. However, revenue for the half fell to A$585 million, down about 10% from the previous year.
Gaming revenue dropped 18%, weighed down by challenging trading conditions and the closure of the Treasury Brisbane Casino. Margins were also pressured by regulatory changes, including New South Wales’ ban on cash transactions aimed at combating money laundering, which has altered customer behavior at Star’s Sydney property.
The company said operating conditions remained difficult in January, with revenue at its Sydney casino down 6% compared with the same period last year.
Despite the narrower loss, analysts noted that underlying pressures remain significant. Marc Jocum, senior product and investment strategist at Global X ETFs, said the revenue decline suggests that Star’s financial stability depends heavily on completing a refinancing deal rather than on earnings growth.
Star confirmed it had secured a waiver for certain financial compliance requirements under its loan facility agreement as of December 31, 2025. Under the waiver’s terms, the company must secure a refinancing commitment letter by March 31 and finalize refinancing by May 15 to avoid default.
On Thursday, Star announced a non-binding term sheet agreement with U.S.-based private credit manager WhiteHawk Capital Partners for a proposed debt refinancing, a move viewed as critical to shoring up its balance sheet.
The results underscore the ongoing challenges facing Australia’s casino sector, as tighter regulation and softer gaming demand continue to weigh on profitability.