US gaming giant Bally’s Corporation makes $250m bid for Star Entertainment

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US gaming giant Bally’s Corporation makes $250m bid for Star Entertainment

US casino operator Bally’s Corporation has made a dramatic last-ditch $250m offer for embattled gaming giant Star Entertainment that would preserve Star’s footprint in Brisbane, the Gold Coast and Sydney.

The offer, delivered in a letter to Star’s board on Monday morning, would inject $250m into Star in return for a 50.1 per cent stake in the company.

Bally’s chairman Soo Kim said the deal would preserve Star’s “businesses, assets and platforms”, meaning its Brisbane, Gold Coast and Sydney operations.

“Our strategy for Star is built on the simple premise that keeping in place Star’s current businesses, assets and platforms will provide a stronger and more successful business over time,” the letter reads.

“While we understand the rationale for Star’s recently announced transactions, we believe that our proposal offers Star and its stakeholders far greater value and operational flexibility as well as the upside from retaining Star’s current projects and other assets.”

The shock Bally’s move hopes to snuff out a deal brokered on Friday that involves Star selling out its position in Brisbane to its ******** joint venture partners and consolidating its operations on the Gold Coast and Sydney.

Camera IconStar operates casinos in Brisbane, the Gold Coast and Sydney. NewsWire / Glenn Campbell Credit: News Corp Australia

Mr Kim said his company was prepared to “invest significant time and resources” to return Star to “profitability and sustainability”.

He also said he was open to discussing a “larger transaction depending on our discussions with respect to Star’s liquidity and capital needs”.

Bally’s operates 19 resorts and casinos across the US, including casinos in gaming meccas Las Vegas and Atlantic City.

In an announcement to the ASX on Friday, Star said it had entered into an agreement with Chow **** Fook Enterprises and Far East Consortium to exit its 50 per cent interest in the Howard Smith Wharves precinct in Brisbane.

The company said the deal would help it with near-term liquidity challenges and also remove a looming $1.4bn debt obligation.

“The transaction has a number of financial benefits for The Star,” the company said.

“An upfront cash payment of $53m, with $35m received today. This payment supports The Star’s near-term liquidity needs.

“The Star will not be required to make further equity contributions to DBC (Destination Brisbane Consortium) after March 31, 2025.

“The Star had otherwise expected future equity contributions to DBC to be at least $212m.

“A condition of the transaction is that The Star will be released from the parent company in relation to its 50 per cent share of the DBC debt facility (current drawn balance is $1.4bn).”

Star would also hand over its Treasury Hotel and carpark in the Brisbane CBD under the deal.

Shares in Star remained suspended from trading as the company scrambles to stave off collapse.

The troubled gaming giant is nearly out of cash and confronting a severe downturn in revenues as an exodus of high rollers and cost-of-living pressures hit the business.

It is also battling a tangled swirl of corporate watchdog investigations and penalties for serious failures at its operations.

In October 2022, the NSW Independent Casino Commission imposed a $100m fine on Star after finding the company had allowed money laundering to take place at its Sydney casino.

A report into the business also found the company had exploited vulnerable gamblers.

NSW Premier Chris Minns and Queensland Premier David Crisafulli has so far declined to offer taxpayer money to bail out the company, which counts some 9000 employees across the two states.

The company’s collapse has been slow but steady.

In July last year, the company held a market capitalisation of $1.5bn.

Bally’s and Star have been contacted for comment.

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