Star Entertainment Group has announced the appointment of former Crown Resorts CEO, Steve McCann, as its new Chief Executive Officer. McCann will assume his new role on 8 July, pending necessary regulatory approvals. This appointment comes at a pivotal time for the company, which has been navigating a myriad of challenges and regulatory issues.
Steve McCann steps into the role previously held by Robbie Cooke, who departed in March but remained in a consultancy capacity during the transition period. In the interim, Neale O’Connell, who has been serving as the Acting CEO, and Anne Ward, the newly appointed Chair, managed the company’s affairs.
McCann brings nearly three decades of executive experience to the table, including an impactful 18-month tenure as CEO and Managing Director of Crown Resorts between May 2021 and September 2022. His leadership credentials are further bolstered by over 15 years at Lendlease, a prominent real estate development and investment group, where he served an extensive period as its group CEO. Prior to these roles, McCann held senior leadership positions at ABN AMRO and Bankers Trust.
In addressing his new role at Star, McCann recognized the gravity of the situation and expressed his dedication to restoring stakeholder confidence. “I acknowledge that there are many complex issues and challenges for the company to address,” McCann stated. “I am committed to working with the board and various stakeholders to help drive change, restore confidence, and achieve a sustainable resolution.”
Chair Anne Ward echoed McCann’s sentiments, expressing the board’s optimism about his appointment. “Given his time with Crown and his long-standing leadership at Lendlease, he has the right credentials to lead Star’s remediation programme,” Ward remarked. “His track record reflects his capability to work collaboratively with multiple stakeholders and lead meaningful transformational change and cultural renewal.”
Star Entertainment has faced significant regulatory scrutiny in recent years. Both McCann and Ward acknowledge that rebuilding customer trust will require substantial effort. A particularly pressing issue is the second inquiry by the New South Wales Independent Casino Commission (NICC), led by Adam Bell SC, who also supervised the initial Bell report.
Ward is tasked with overseeing how Star has implemented the recommendations from the first inquiry. In September 2022, Star was deemed unsuitable to hold a casino license in New South Wales after investigations revealed extensive anti-money laundering and social responsibility failures. The second inquiry launched in February, and a final report was issued last month, though the details have not yet been disclosed.
Further complicating matters, Queensland authorities announced another delay in the planned suspension of Star’s license last month.
. The company had been fined $100 million in December 2022 and warned that its license could be suspended unless it demonstrated its suitability to operate. Initially set for December 2023, the deadline was extended to May 2023 after Star submitted a draft remediation plan. However, the authorities have delayed this decision again, indicating they want to review the findings of the second Bell Inquiry before finalizing their decision.
Amid these regulatory challenges, Star Entertainment is also preparing to report a decline in full-year revenue, attributing the downturn to “challenging” trading conditions over the past 12 months. For the fiscal year ending 30 June, the company forecasts revenue between AU$1.68 billion to AU$1.69 billion, a reduction of approximately 11.1% compared to the AU$1.90 billion reported in FY23.
The past year’s challenging trading conditions have driven up operating costs, attributable to the company’s remediation and transformation activities, as well as increased investments in risk and control functions. Consequently, Star is also anticipating a decline in adjusted EBITDA, with projections ranging between AU$165 million and AU$180 million—a potential year-on-year decline of up to 43.2%.
As the final quarter of the fiscal year draws to a close, expectations remain subdued. Star predicts a 3.3% year-on-year revenue decline for Q4, alongside a 4.3% quarter-on-quarter drop.
In terms of future strategy, Star Entertainment is contemplating asset sales to streamline operations. Potential assets up for sale include the Treasury casino, hotel, and car park, with ongoing negotiations. The company is also exploring the sale of other non-core assets, with further updates anticipated when it announces its FY24 results later in the year.
With McCann at the helm, Star Entertainment hopes to navigate its way out of these tumultuous waters, revitalize its operations, and regain the trust and confidence of its stakeholders.
