Bally's has reportedly emerged as a potential buyer of Star Entertainment, according to a 21 February report in the Australian Financial Review that relied on anonymous sources. The report said a delegation of Bally's officials travelled to Australia earlier this month to meet Star and its lenders, and toured Star Sydney, Star Brisbane and Star Gold Coast. Bally's chairman Soo Kim was rumoured to be among the group. His hedge fund, Standard General, became Bally's majority owner after a buyout last July. Bally's declined to comment on the report. None of this has been confirmed by either company.

A distressed asset

Bally's operates 19 casinos in 11 US states and has no international holdings. It is also working on projects in Chicago, Las Vegas and New York. Las Vegas-based consultant Brendan Bussmann of B Global Advisors told iGB that Bally's is stretched thin even at home and that Star is not an easy acquisition. He said operators with an existing Asian presence, in Macau or Singapore for example, would likely make more sense.

"You're walking into a situation where there have been significant compliance issues… it's just a difficult situation to walk into," Bussmann told iGB.

Star has been the subject of two suitability inquiries for its Star Sydney licence and was found unsuitable both times, most recently last October. It awaits another assessment after 31 March. It has been fined hundreds of millions of dollars and expects another large fine from financial crime regulator Austrac.

Other options on the table

Bally's is the latest name linked to Star since the company's 8 January announcement that its cash and liquidity were running down. Star has already sold its Star Sydney Events Centre assets for AU$60 million and may sell more.

According to a 4 February report in The Australian, private equity firm Blackstone is also believed to be interested, but would reportedly make an offer only if Star enters administration. Blackstone already owns rival Crown Resorts, which it bought for US$6.3 billion in June 2022. NSW rules prohibit one company from operating both Sydney casinos. iGB noted that Star's difficulties might soften officials' stance, though that is speculation.

On 10 February, Star said it had received buyout offers for its Star Brisbane joint venture from partners Chow Tai Fook and Far East Consortium. It said the offers had not "provided sufficient value". On 17 February, Star confirmed a AU$650 million debt refinancing proposal from US-based Oaktree Capital. Star said there is no certainty any of these discussions will produce arrangements that materially increase its liquidity, and that without them "there remains material uncertainty as to the group's ability to continue as a going concern".

Star chief executive Steve McCann, appointed last June, previously led Crown, where he helped guide the Blackstone takeover. iGB reports he has said Star needed more time before considering mergers and acquisitions.

Regulatory hurdles and timing

Any takeover would face a demanding approval process. The NSW Independent Casino Commission (NICC) was created in 2022 as a casino-specific regulator, split from Liquor and Gaming NSW, in response to scandals involving Star and Crown. Peter Cohen, a consultant and former chief executive of the Victorian regulator, told iGB last July that a takeover would be tricky and slow. He suggested the NICC might check probity while another department, such as NSW Treasury, examines a bidder's finances and operational capability. He estimated a transition could take 18 to 24 months or longer, which would push completion into late 2026 or 2027.

iGB noted that Bally's flagship Chicago casino is due to be completed in September 2026. It also wants to open its Las Vegas casino alongside an MLB stadium, which would mean spring 2028. In New York, bids for three downstate licences are due by June, with awards expected by the end of the year. Bally's is seeking to build a US$2.5 billion resort in the Bronx.

No price, terms or formal offer from Bally's has been disclosed.