By Savyata Mishra

(Reuters) – Australia’s Star Leisure Group on Monday stated it expects to incur a non-cash impairment cost of as much as A$1.6 billion ($1.11 billion) within the first half of its fiscal yr if a proposed hike within the on line casino responsibility charge in New South Wales is applied in its present kind.

Star Leisure stated it might incur remediation prices of about A$20 million through the six months ended Dec. 31, 2022, because it makes an attempt to “enhance compliance processes because the group seeks to return to licence suitability”.

The corporate has been embroiled in a slew of presidency probes over potential breaches of anti-money laundering and counter-terrorism legal guidelines at its casinos up to now two years, swinging to an annual web loss in August. Its share worth has been greater than halved.

Star Leisure shares slumped nearly 11% to A$1.67 in early buying and selling.

The on line casino operator on Monday additionally introduced quite a lot of initiatives, together with loyalty advantages and pricing actions, to answer competitors in Sydney, the place its greater rival Crown Resorts operates. The initiatives would probably contribute about A$40 million on an annualised foundation to the working efficiency, Star Leisure stated.

It expects underlying earnings earlier than curiosity, taxes, depreciation and amortisation inside A$195 million to A$205 million in its first-half outcomes.

Moreover, a possible gaming tax change in NSW introduced in December and prone to come into impact in July 2023 threatens to considerably harm the profitability of Star Leisure’s Sydney operations – which made up half its income in fiscal 2022.

The corporate stated it intends to undertake an pressing overview of the working mannequin and property of its Sydney enterprise if the state authorities’s proposal goes forward.

The on line casino operator forecast underlying earnings earlier than curiosity, taxes, depreciation and amortisation (EBITDA) of A$330 million to A$360 million for the yr ending June 30, 2023, in comparison with the A$237 million reported final yr.

($1 = 1.4457 Australian {dollars})