Star Entertainment Group which operates a casino in Gold Coast, Australia and Sydney said it still has not been able to prepare its preliminary full-year report, a statement taken with alarm concerning the firm’s financial performance and compliance. This delay comes as yet another problem for the organization which has been struggling with a number of regulatory probes and financial difficulties over the past few years.
The company which has gambling houses in Sydney, Brisbane and the Gold Coast has been in the center of pressure after claims of money laundering as well as involvement of criminals in the gambling parlors were leveled against it. These problems have resulted in recurrent regulatory scrutiny, penalties and a major change in the corporate governance and business procedures of the company.
This would only indicate that Star Entertainment’s problems in addressing its financial and regulatory challenges remain unresolved, as seen from the failure to come up with its annual results. Delays may also reflect problems with audit processes or the requirement for further internal investigations to address possibly adverse regulatory non-compliance.
The investors and industry analysts are keenly observing this situation because because the Non GAAP measures of financial reporting can have tremendous effect on the company’s stock price and it’s the market reputation. It may also affect dealings with lenders, partners and regulatory authorities because information concerning Star Entertainment’s balance sheets are not clear.
The operation of casinos in the country has been faced with enhanced regulatory measures in recent past with the authorities deeming it fit to fight against money laundering and other related vices. The recent problems of Star Entertainment are characteristic of an overall trend where many large casino operators have been put under increased scrutiny and penalised.
While the company fumes over its issues and closes its annual report, serious doubts arise on the sustainability of the current business model besides the question on how the firm will regain the confidence of both regulators and the public. The result of such a scenario may pose negative impacts on the Australian casino industry especially due to the legal changes that it has brought to the particular sector.
