Star Entertainment has announced the departure of its chief executive, Steve McCann, with a substantial $16 million in pay and cash bonuses, just 17 months after he joined the beleaguered casino operator. This move comes amid ongoing financial struggles and potential regulatory penalties that could threaten the company’s future.
The departure of McCann, a former World Series poker player, was largely anticipated following a significant $300 million investment earlier this year by US casino operator Bally’s Corporation and pokies billionaire Bruce Mathieson. This investment effectively handed them control of the company last month.
Despite the financial lifeline, Star Entertainment faces a looming threat from Austrac, which could impose a fine for money-laundering breaches that is expected to reach up to $300 million. Such a penalty could potentially trigger a financial collapse for the casino operator.
Strategic Shifts and Leadership Changes
In a statement to the Australian Securities Exchange (ASX) announcing his immediate departure, McCann expressed optimism about the strategic investment by Bally’s Corporation and Investment Holdings Pty Ltd. He described it as an opportunity for Star to “move in a new direction and pursue a pathway to recovery and future growth.”
McCann stated, “Now is the right time for new leadership to be put in place with the experience and passion to build on that momentum and take The Star forward.” He will remain available to assist the company with government and regulatory issues until July.
Bruce Mathieson Jnr, who will lead the search for a new CEO as the executive chairman, expressed gratitude for McCann’s leadership during a challenging period for The Star. Mathieson’s Investment Holdings and Bally’s now collectively own 61 percent of the casino operator.
A History of Executive Turmoil
Star Entertainment’s decision to bring in McCann last year followed a purge of its executive team. The New South Wales regulator had lost confidence in the company’s commitment to a cultural overhaul after extensive anti-money laundering and counterterrorism failings were uncovered in 2021.
McCann’s compensation package at Star was notably lucrative, including a $2.5 million annual salary, a $2.5 million sign-on bonus, a $2.5 million retention bonus, $2.5 million in short-term incentives, and performance rights worth $1 million.
“The short, high-stakes stint at Star was even more lucrative than McCann’s brief role at Crown Resorts,” industry analysts noted.
Prior to his role at Star, McCann was tasked with stabilizing Crown Resorts in 2021 after the company lost its casino licenses due to its own regulatory challenges. He left Crown with $9 million in salary and bonuses following its sale to private equity firm Blackstone for $8.9 billion.
Looking Ahead: Challenges and Opportunities
The announcement of McCann’s departure highlights the ongoing challenges facing Star Entertainment as it navigates regulatory scrutiny and financial instability. The company’s future hinges on its ability to address these issues while capitalizing on the strategic investments made by its new stakeholders.
As Star Entertainment seeks new leadership, the focus will be on finding a CEO capable of steering the company through its current crisis and positioning it for long-term success. The search for a new leader will be critical in determining the company’s direction in the coming years.
In the meantime, industry experts will be closely watching how Star manages its regulatory challenges and financial obligations. The company’s ability to recover and thrive will depend on its strategic decisions and leadership in this pivotal period.
As McCann himself noted upon leaving Crown, “It has been intense. I am looking forward to a break.” His brief tenure at Star underscores the high-stakes nature of leadership in the casino industry, where fortunes can change rapidly amid regulatory and financial pressures.
