{"id":712,"date":"2025-05-27T06:00:44","date_gmt":"2025-05-27T06:00:44","guid":{"rendered":"http:\/\/www.chuckwardrealestate.com\/?p=712"},"modified":"2025-09-22T12:10:02","modified_gmt":"2025-09-22T12:10:02","slug":"ballys-could-have-difficulty-adding-more-cash-to-star-says-consulting-firm","status":"publish","type":"post","link":"http:\/\/www.chuckwardrealestate.com\/index.php\/2025\/05\/27\/ballys-could-have-difficulty-adding-more-cash-to-star-says-consulting-firm\/","title":{"rendered":"Bally\u2019s Could Have Difficulty Adding More Cash to Star, Says Consulting Firm"},"content":{"rendered":"<ul>\n<li><strong>Firm warns Bally\u2019s debt, US casino commitments could crimp cash allocated to Star<\/strong><\/li>\n<li><strong>Consultant still supports Bally\u2019s takeover of Australian gaming company<\/strong><\/li>\n<\/ul>\n<hr \/>\n<p>Bally\u2019s large debt burden and its commitments to various US casino projects could make it difficult for the company to add more cash to Star Entertainment beyond the $195 million takeover price &#8212; a portion of which is being funded by another investor.<\/p>\n<figure id=\"attachment_333572\" aria-describedby=\"caption-attachment-333572\" data-style=\"width: 858px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" class=\"wp-image-333572 size-post-thumbnail-858xAUTO lazyload\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" alt=\"Star Entertainment Sydney casino New South Wales\" width=\"858\" height=\"572\" data-src=\"http:\/\/www.chuckwardrealestate.com\/wp-content\/uploads\/2025\/05\/the-star-exterior-858x572-1.jpg\"><figcaption>The Star Sydney. A consulting firm said there are risks associated with Bally&#8217;s acquiring the Australian company. (Image: The Star Entertainment Group)<\/figcaption><\/figure>\n<p>That\u2019s according to investing consultancy Grant Samuel &amp; Associates Pty Ltd., an independent advisory firm providing opinion on <a href=\"https:\/\/www.casino.org\/news\/ballys-mulled-waiting-for-star-to-fall-into-administration\/\">Bally\u2019s proposed takeover<\/a> of Star. While the consulting outfit expressed reservations about Bally\u2019s $3 billion in outstanding liabilities, it pointed out that just $20 million of that sum matures in each of the next three years before $1.8 billion comes due in 2028. Grant Samuel recommended to Star investors that the company is better off accepting Bally\u2019s offer than rejecting it.<\/p>\n<blockquote class=\"main-blockquote\">\n<p>The sheer amount of debt it carries raises a question as to whether it has sufficient financial firepower to participate in any significant follow on capital injections if that is required by The Star,\u201d said the consultancy by way of a Star filing with the Australian Securities Exchange (ASX).<\/p>\n<\/blockquote>\n<p>Some analysts <a href=\"https:\/\/www.casino.org\/news\/ballys-star-deal-risky-more-capital-may-be-needed-says-cbre\/\">have previously speculated<\/a> that Bally\u2019s and investor Bruce Mathieson may need to pony up more capital for Star beyond the initial purchase price, noting that investors in the US may be concerned about Bally\u2019s using restricted cash flow to fund the Australian transaction. Star is cash flow negative and <a href=\"https:\/\/www.casino.org\/news\/ballys-makes-11th-hour-bid-to-save-star-entertainment\/\">its cash burn rate<\/a> indicates the company was on death\u2019s doorstep before Bally\u2019s and Mathieson \u2014 Star\u2019s biggest shareholder \u2014 came swooping in.<\/p>\n<h2>Chicago, Las Vegas Could Demand Bally\u2019s Cash<\/h2>\n<p>Bally\u2019s is currently building a $1.7 billion casino hotel in Chicago &#8212; its most expensive project to date &#8212; and capital will be required in the future when a decision is made regarding the fate of the former site of Tropicana Las Vegas.<\/p>\n<div class=\"callout\">\n<p>Additionally, the operator would likely be staring at a multibillion development tab if it wins one of the three downstate casino permits that will be <a href=\"https:\/\/www.casino.org\/news\/if-ballys-wins-bronx-casino-license-trump-gets-115m-windfall\/\">awarded in New York<\/a> in the coming months. Each of those projects has the potential to divert capital away from Star.<\/p>\n<\/div>\n<p>Grant Samuel noted that in most years, Bally\u2019s earnings before interest, taxes, depreciation, and amortization (EBITDA) would be enough to support Star\u2019s cash needs, but that\u2019s likely not the case at the moment due to the buyer\u2019s commitments in Chicago and Las Vegas. The consulting firm didn\u2019t even mention the possibility of a New York license.<\/p>\n<p>Grant Samuel further observed that Bally\u2019s \u201ccarries a significant level of gearing (which, at around 80%, is much higher than nearly every other listed casino operator).\u201d<\/p>\n<h2>Other Concerns About Bally\u2019s\/Star Deal<\/h2>\n<p>The investment consultancy also highlighted potential operational risks for Bally\u2019s in Australia because it hasn\u2019t done business there in the past. In addition, Star is facing <a href=\"https:\/\/www.casino.org\/news\/ballys-corp-mathieson-rescue-star-entertainment-from-oblivion\/\">heavy regulatory scrutiny<\/a> in the country and Bally\u2019s domestic casinos aren\u2019t comparable in scale to Star\u2019s Aussie properties.<\/p>\n<p><strong>In the US, the bulk of Bally\u2019s gaming venues are in smaller regional markets whereas Star\u2019s casino hotels are in large metropolitan areas.<\/strong><\/p>\n<p>\u201cBally\u2019s has no prior experience in the casino industry in Australia. While the US casino industry is also heavily regulated, the nature of that regulation is not necessarily the same as in Australia,\u201d concludes Grant Samuel. \u201cThere are also important cultural, demographic, and other differences between the markets.\u201d<\/p>\n<p>The post <a href=\"https:\/\/www.casino.org\/news\/ballys-could-have-difficulty-adding-more-cash-to-star-says-consulting-firm\/\">Bally\u2019s Could Have Difficulty Adding More Cash to Star, Says Consulting Firm<\/a> appeared first on <a href=\"https:\/\/www.casino.org\/news\">Casino.org<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Firm warns Bally\u2019s debt, US casino commitments could crimp cash allocated to Star Consultant still supports Bally\u2019s takeover of Australian gaming company Bally\u2019s large debt burden and its commitments to various US casino projects could make it difficult for the company to add more cash to Star Entertainment beyond the $195 million takeover price &#8212; a portion of which is [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":714,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[12],"tags":[],"_links":{"self":[{"href":"http:\/\/www.chuckwardrealestate.com\/index.php\/wp-json\/wp\/v2\/posts\/712"}],"collection":[{"href":"http:\/\/www.chuckwardrealestate.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.chuckwardrealestate.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.chuckwardrealestate.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.chuckwardrealestate.com\/index.php\/wp-json\/wp\/v2\/comments?post=712"}],"version-history":[{"count":2,"href":"http:\/\/www.chuckwardrealestate.com\/index.php\/wp-json\/wp\/v2\/posts\/712\/revisions"}],"predecessor-version":[{"id":715,"href":"http:\/\/www.chuckwardrealestate.com\/index.php\/wp-json\/wp\/v2\/posts\/712\/revisions\/715"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/www.chuckwardrealestate.com\/index.php\/wp-json\/wp\/v2\/media\/714"}],"wp:attachment":[{"href":"http:\/\/www.chuckwardrealestate.com\/index.php\/wp-json\/wp\/v2\/media?parent=712"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.chuckwardrealestate.com\/index.php\/wp-json\/wp\/v2\/categories?post=712"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.chuckwardrealestate.com\/index.php\/wp-json\/wp\/v2\/tags?post=712"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}