Star said it intended to undertake an urgent review of the operating model and assets of its Sydney business if the state government's proposal went ahead.
Shares of the country's second-largest casino operator fell as much as 21.9% to hit an all-time low of A$1.465, while the broader market was slightly weaker. The tax reform proposal is playing a central role in New South Wales elections scheduled for March 25. The incumbent conservative state government also wants to phase in mandatory cashless poker machines in five years to curb the problem of gambling and money laundering, while the centre-left Labor opposition wants a limited trial of cashless machines only.
The company said it would incur remediation costs of about A$20 million in the six months ended Dec. 31, as it attempted to improve compliance processes to return to licence suitability. The embattled firm's earnings have dwindled amid a slew of government probes, COVID-19 curbs and three class actions. It reported an annualStar forecast underlying earnings before interest, taxes, depreciation and amortisation of A$330 million to A$360 million for the year ending June 30, 2023, compared with the A$237 million reported last year and lower than Factset consensus of A$446 million.