The revelations caused Star’s stock value to fall by 22.9 per cent on Monday to close at $3.30 per share,as NSW Premier Dominic Perrottet described the reports as “concerning” and threatened “appropriate action” against the casino.
One investor,who requested anonymity,said the instinct reaction was to sell Star shares after similar allegations against rival casino Crown triggered inquiries that cast doubt over the future of its gambling licence.
“If you look at the Crown journey,versus the Star journey,people are extrapolating this is just the beginning,” said the investor. “From that standpoint,you may as well take your damage on day one and reassess as more and more of the facts and evidence emerges from both sides. That’s your instinctual reaction.”
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Star released an ASX statement on Monday morning claiming it was “concerned” about a number of assertions in the reports “that it considers misleading” but said there were constraints on discussing specific individual clients.
Forager Funds chief investment officer Steve Johnson said the company would need to provide investors with a lot more information about how exposed the casino is to further regulation of high-rollers to address the “huge cloud of uncertainty” over the company’s outlook.
“They’re going to have to clarify how much of their revenue is exposed to some of these problematic areas,” he said. “They’ve tried to give some information around number of clients,but that is irrelevant if that client is spending 100 times more than someone else.”