Casinos operator The Star Entertainment Group's profit has dropped by more than a third because high-rolling international VIP gamblers won more times than expected.
The group, whose casinos include The Star in Sydney, Brisbane's Treasury and Jupiters Gold Coast, says net profit fell by 37.9 per cent to $60.3 million in the six months to December 31, 2015.
The lucky high-rolling VIPs put an $80 million dent into The Star Entertainment Group's profits.
If the VIP gamblers had won at the expected rate, the group's net profit would have been $142 million - up 26.1 per cent.
The Star group chief executive Matt Bekier described the VIP gambler win rate as a "freakish" statistical event.
"We've looked at it every which way," Mr Bekier said on Tuesday.
"We've looked at the distribution of bets, we've looked at the players, we looked at who won, we understood the lifetime history of the players that won - and it's just bad luck."
Mr Bekier said there was no reason to expect the win rate against VIP gamblers to continue at the low level.
"Bad luck and good luck are not sustainable, so this will normalise," he said.
"There's six very, very happy guests who we cannot wait to welcome back to our properties."
The group said that aside from the win rate against VIP gamblers, its casinos and hotels had performed well.
The domestic gaming businesses generated strong revenue growth on the back of improved facilities, loyalty programs, better marketing, and stronger economic conditions in each of the group's markets.
Mr Bekier said strong operational momentum was continuing into the early part of the second half of the financial year.
The international VIP gambling business so far into the second half was tracking in line with management's expectations.
The group said disruption from expansion and refurbishment work at The Star Sydney and Jupiters Gold Coast would have some impact on revenue and earnings throughout the second half.
The Star Entertainment Group is spending up to $1 billion on further redeveloping The Star casino and hotel complex in Sydney, and up to $850 million on new facilities and renovations at Jupiters Gold Coast.
The group is also building a new $3 billion casino and resort complex at Queens Wharf in Brisbane to replace the Treasury casino.
Mr Bekier said the group was looking towards the long-term prospects of the tourism sector in Australia, especially given the recent free trade agreement with China.
Australia needed to develop more high-end hotel accommodation, and The Star group wanted to ensure that it had globally competitive facilities at all of its properties.
Shares in The Star Entertainment group closed up nine cents to $5.45.
VIP GAMBLERS GET LUCKY AT THE STAR
* First-half net profit down 37.9pct to $60.3m
* Revenue down 3.2pct to $1.05b
* Interim dividend of 5.5 cents per share, up 10pct from five cents
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