A report linking Bally’s Corp. to Australia’s Star Entertainment raises many questions. Perhaps the most important is, would that be good for either side? 
Citing anonymous sources, the Australian Financial Review reported 21 February that Bally’s has emerged as a potential suitor for the ailing Star Entertainment. A delegation of company officials reportedly travelled to Australia earlier this month to meet with Star and its lenders.
Among them was rumoured to be chairman Soo Kim, whose hedge fund Standard General (SG) is now the majority owner of Bally’s following a buyout last July. The delegation was said to have toured Star’s three properties, Star Sydney, Star Brisbane and Star Gold Coast.
Bally’s operates 19 casinos in 11 US states but does not have any international holdings. In addition to existing operations, the company has its hands full with projects in Chicago, Las Vegas and New York.
The company declined to comment on the Star report.
Bally’s has multiple projects in progress
The question, however, is whether a Bally’s-Star marriage makes sense for both sides. Las Vegas-based consultant Brendan Bussmann of B Global Advisors noted that even in the US, Bally’s is stretched thin. On top of that, Star as a distressed asset is not exactly an easy acquisition. Operators with an existing Asian presence in Macau, Singapore or elsewhere would likely make more sense.
“Consider the projects [Bally’s] has here right now,” Bussmann told iGB. “You’ve got challenges with Chicago, you’ve got challenges with Las Vegas. I’m just not sure at this point in time why you’d want to take on another challenge. Now you’re walking into a situation where there have been significant compliance issues … it’s just a difficult situation to walk into.”
Star has been subject to two suitability inquiries for its Star Sydney licence, and was deemed unsuitable both times, most recently last October. It currently awaits another assessment after 31 March. It has been fined hundreds of millions for its shortcomings. The company anticipates another large fine from federal financial watchdog Austrac.
A growing list of Star suitors
For Star, Bally’s is the latest company to be mentioned as a potential saviour since its 8 January announcement of depleting cash and liquidity. It has already sold off its Star Sydney Events Centre assets for A$60 million (£30.1 million/€36.4 million/US$38.1 million) and may continue to divest.
According to a 4 February report from The Australian, US private equity giant Blackstone is also believed to be interested. However, the firm will reportedly only extend an offer if Star enters administration.
There are other hurdles in that scenario as well. Blackstone already owns Star’s chief rival Crown Resorts, which operates casinos in Sydney, Melbourne and Perth. It purchased the operator for US$6.3 billion in June 2022. State regulations in New South Wales (NSW) prohibit one company from operating both Sydney casinos. But it’s possible Star’s struggles may cause officials to soften their stance.
Additionally, on 10 February, Star announced it had received buyout offers for its Star Brisbane joint venture from partners Chow Tai Fook and Far East Consortium. The multibillion-dollar project opened last August, and Star said those offers have not “provided sufficient value.” Finally, on 17 February the operator confirmed it had received a A$650 million debt refinancing proposal from US-based Oaktree Capital.
In the midst of these developments, Star said on the Oaktree announcement that “there is no certainty that any of these discussions or negotiations will result in one or more definitive arrangements that might materially increase the Group’s liquidity position. In the absence of one or more of those arrangements, there remains material uncertainty as to the Group’s ability to continue as a going concern.”
What would the transition process look like?
Star CEO Steve McCann, appointed last June, held the same post at Crown. There he helped guide the Blackstone takeover, but he previously said that Star needed more time before considering M&A possibilities. Over the course of its regulatory troubles there was a belief that the company was “too big to fail.” It employs thousands across multiple states. The January cash hemorrhage announcement, however, seemed to change those sentiments.
But what would a takeover look like from a regulatory perspective? There are, of course, standard protocols in place, but the extent of Star’s failures have basically rewritten the rulebooks. In NSW, the NSW Independent Casino Commission (NICC) was formed in 2022 as a casino-specific body. It was split off from the overall umbrella of Liquor and Gaming NSW. This was in direct response to the multitude of scandals between Star and Crown.
Peter Cohen, a consultant with The Agenda Group and former CEO of the Victorian state regulator, told iGB last July that any takeover would be tricky, and slow. He surmised that the vetting process would likely be split between multiple agencies.
“It is possible that the process might be a hybrid of NICC checking for probity suitability while another department, such as NSW treasury, examine the bidders’ finances and operational capability,” Cohen explained at the time.
Ongoing projects would be further along
The transition timeline could vary from 18 to 24 months or beyond, Cohen said. That means it could go into late 2026 or 2027 before a Star acquisition would be finalised. By that time, Bally’s would be much further along in its current projects. It would be nearing or fresh off the opening of its flagship Chicago casino, set to be completed in September 2026.
The company has also said it wants to debut its Las Vegas casino alongside the completion of the MLB stadium on the same site. That would make for a spring 2028 opening, not long after a potential Star takeover.
In New York, bids for three available downstate licences are due by June, with those being awarded by the end of the year. Bally’s seeks to build a $2.5 billion resort on a golf course it owns on Ferry Point in the Bronx. If awarded a licence, that project would also presumably be in progress in late 2026 or 2027.
