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The Star wants high-end gambling tourists

Trevor Chappell  |  23 Aug 2017Text size  Decrease  Increase  |  

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MELBOURNE - [AAP] Casino operator The Star Entertainment Group (ASX: SGR) hopes well-heeled Asian tourists will help compensate for the VIP high-rollers who stopped visiting following the detention of rival Crown Resorts staff in China.

The Star says its strategy of developing hotels and entertainment venues--and upgrading gambling facilities at its Sydney and Gold Coast casinos--is starting to attract more foreign visitors from countries other than China.

Turnover from The Star's international VIP gambling business dropped 20 per cent in the year to June 30, affected by a high win rate against high-rollers and the disruption to the North Asia VIP market due to the Crown detentions in October 2016.

But chief executive Matt Bekier says there was an increase in deposits of funds from VIP gamblers outside of its north Asia business in the second half of the financial year.

He said The Star is casting a wider net.

"We think that, as we have reflected on our VIP strategy, the real sweet spot for us is the customer that's diversified, who wants to do more than just gamble, a family who seeks out tourism experiences," Mr Bekier said on Wednesday.

"Therefore, we are focusing on a customer that probably looks more like a super-high-end tourist customer who enjoys gaming.

"And that customer comes from across Asia, and in fact across the world."

Mr Bekier would like to see these customers eventually make up 25 per cent of the group's international VIP business.

The Star made a net profit of $264.4 million in 2016/17, up 36 per cent from the previous year, due to total higher second-half revenue from its Sydney, Gold Coast and Brisbane casinos and its high win rate in the international VIP rebate business.

The Star's normalised net profit, which excludes variations in the win rate against high-rolling gamblers, was down 11 per cent at $214.5 million as a result of disruption to the North Asia market.

Mr Bekier said the VIP high-roller business plunged by about 40 per cent after the Crown detentions as Australian casino operators stopped marketing on the Chinese mainland.

Although VIP numbers had recovering somewhat, Mr Bekier said it would take a while to climb out of the hole.

Shares in The Star were up 34 cents, or 6.7 per cent, at $5.44 at 1421 AEST.

STAR ENTERTAINMENT FY PROFIT BOOST

* Net profit up 36pct to $264.4m

* Normalised net profit down 11.1pct to $214.5m

* Revenue up 3.3pct to $2.3bn

* Final dividend up 1 cent to 8.5 cents, fully franked

 

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