The operator of Sydney's The Star and Brisbane's Treasury says its strategy of targeting VIP gamblers from south-east Asia and less wealthy gamblers is working to compensate for a drop-off in high rollers from from China.
The Star Entertainment Group's turnover from VIP gambling fell 12 per cent to $21 billion in the first half of the financial year, partly because the detention in China of employees of rival Crown Resorts in October triggered caution in the market.
VIP turnover was also down because Star Entertainment's casinos had a higher-than-average win rate against high-rolling gamblers, which made gamblers less willing to bet again.
Star Entertainment also operates Jupiters Gold Coast.
Chief executive Matt Bekier says the group has been seeking to compensate for the drop-off in the China VIP market by attracting VIP gamblers from Singapore, Malaysia, Indonesia and Thailand.
The group is also seeking to lure more "mid-range" gamblers who are not as rich as the small number of high-rolling, so-called "whales".
Mr Bekier said mid-range players provide front money (money deposited to establish credit for play) of $1 million to $5 million and expect the same level of service as "whales" when they get to the property.
But the casino does not have to provide a jet to bring them to Australia as it does for a player who puts up $20 million.
Following the detention of the Crown employees in China, Star Entertainment's turnover from VIP gaming dropped by 27 per cent in November and December, Mr Bekier said.
But the group's strategy of generating 25 per cent of international gaming business from south-east Asia, 25 per cent from the premium mass market, and 50 per cent from north Asia had moderated the impact and was generating pleasing growth.
"It's not yet big enough to fully offset the negative impact of north Asia, but it's clearly helping us to mitigate the impact," Mr Bekier said.
Star Entertainment's domestic business was resilient, despite refurbishment work at The Star and Jupiters disrupting the main gaming floors, Mr Bekier said. That work is now complete.
Net profit more than doubled in the six months to December 31 to $142 million, boosted by the higher win rate against the high-rollers.
After adjusting for that high win rate, net profit was down 18 per cent at $107 million, partly reflecting the disruption caused by capital works.
Shares in Star Entertainment gained two cents to $5.04.
HIGH WIN RATE BOOSTS STAR'S PROFIT
* Half year net profit of $141.8m, up from $60.3m
* Revenue up 12.2pct to $1.18b
* Interim dividend up 2 cents to 7.5 cents
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