JPMorgan Disposes of Star Entertainment Stake

Posted on: December 23, 2024, 01:27h. 

Last updated on: December 23, 2024, 01:27h.

Todd Shriber @etfgodfather Read More

Expertise: Financial, Gaming Business, Mergers and Acquisitions.

JPMorgan Chase & Co. (NYSE: JPM) is no longer an investor in Australian casino operator Star Entertainment.

A regulatory filing with the Australian Securities Exchange (ASX) confirmed that the New York-based bank recently liquidated its stake in Star, which the gaming confirmed in its own filing.

As required under Listing Rule 3.19, The Star Entertainment Group Limited (Company) gives notice that it has become aware that JPMorgan Chase & Co. and its affiliates ceased to be a substantial shareholder of the Company on 18 December 2024,” according to the Star regulatory document.

An October filing with Australian securities regulators noted the bank purchased 5.47% of the gaming company’s voting equity. News of the JPMorgan investment arrived about a month after Star was booted from the Australian Stock Exchange (ASX) for failure to release financial results as scheduled. Star is the largest publicly traded casino operator in that country.

Star Entertainment in Precarious Position

JPMorgan didn’t provide a reason as to why it rapidly dropped its stake in Star Entertainment. However, the gaming company is in a tenuous spot.

Amid a now lengthy anti-money laundering probe, Star is at risk of losing control of its flagship venue, The Star Sydney. That venue has been run by the Australian government since 2022. Star’s other two venues, The Star Brisbane and the Star Gold Coast, are also run by the government.

Earlier this month, Star Entertainment told investors that a hearing on the suspended license for the Star Gold Coast was deferred until March 31, 2025 and that the timeline for appointing a special manager of the casino hotel has been extended to June 31, 2025.

“The Star has also been advised that it is expected to take swift action to address the relevant significant outstanding remediation matters referred to above and that the Commissioner for Liquor and Gaming Regulation will review The Star’s progress in February 2025,” according to that filing.

What’s Next for Star Entertainment

With JPMorgan not providing a reason as to why it swiftly ended its investment in Star, some market participants may be apt to speculate that the move by the bank is an indictment of the gaming company and that the near-term outlook is challenging.

That’s not off-base, though Star and rival Crown could go a long way toward restoring investor confidence by putting long-running regulatory woes behind them.

However, that’s only part of the problem because the Australian casino operators are grappling with attrition among Chinese customers, many of whom have taken their business to Macau or Singapore.