If a global pandemic resulting in ongoing lockdowns, a regulatory investigation and corporate activity rejection were not enough to upset those at The Star Entertainment Group (ASX: SGR), they can add $13 million in historical staff underpayment to their list of operational issues. 

Fortunately for the casino operator, the wage underpayments were uncovered internally and self-reported which is likely to save what would have been further reputational damage. Across a 6-year period, approximately 2,200 employees were affected with Star confirming $13m in remediation expense will be incurred to write the wrong.

“We apologise to any team member impacted by the payment shortfall and we are committed to doing the right thing by acting transparently. Our priority is to address this issue and to ensure that it doesn’t happen again,” said The Star’s Managing Director, Matt Bekier. 

While it is not ideal to be making historical remediation repayments, the $13m of expenses is not going to be particularly significant to the casinos operator which has again warned the market of fledgling financials which continue to be hugely impacted by COVID-19. 

International border restrictions continue to be the biggest headache for The Star, whose casinos in New South Wales and Queensland have historically been hugely popular amongst Asian tourists. 

In addition to those lost opportunities, access to domestic customers has been restricted by property shutdowns and operating restrictions where even when allowed to open, crowd limits and vaccination verification have resulted in reduced patronage. 

The Company is set to release its Half Year results later in the month but anticipates it will have a statutory net loss around $73 million

In addition to the operating struggles, Head Office has not been faring much better having withdrawn their takeover proposal of Crown Resorts (ASX: CWN) in July 2021 when its became clear they could not match rival offers. 

There is also an open investigation by AUSTRAC taking place into The Star for breaches of the Australian Anti-Money Laundering and Counter-Terrorism Financing Act and Anti-Money Laundering and Counter-Terrorism Financing Rules Instrument 2007, of which they are fully cooperating with the regulator. The scope of this investigation was expanded last month. 

The ending of Government assistance first introduced at the start of COVID-19 has also impacted The Star significantly. 

As per their Jobkeeper Payments Notice which had to be reported as part of their ASX requirements, more than 7,000 employees were receiving fortnightly Jobkeeper payments, subsidies paid by the Government to the tune of $157.3 million.