By Zoe Samios

Star Entertainment has appointed former Lendlease and Crown Resorts chief executive Steve McCann to lead the struggling gaming business as it fights to keep its Sydney casino licence and grapples with a lack of high-rollers.

Mr McCann will join Star on July 8, after stepping down from the board of property giant Scentre Group. He will receive a sign-on bonus of $2.5 million and could earn $15 million over two years in take-home pay and incentives if he succeeds in overhauling the company’s culture and effectively implements its remediation program.

Mr McCann’s appointment was flagged by The Australian Financial Review’s Chanticleer column in April.

Mr McCann ran Crown from June 2021 and oversaw the then James Packer-controlled group when it sold to Blackstone the following year for $8.9 billion. He was previously chief executive of Lendlease, a role he held for nearly 13 years.

Matthew Haupt, lead portfolio manager at Wilson Asset Management, had no concerns about how much Mr McCann cost: “You got to pay millions to unlock billions,” he told The Australian Financial Review. “Pay whatever it takes.”

Star chairwoman Anne Ward said she was pleased to have someone with Mr McCann’s calibre. “Given his time with Crown and previous long-standing leadership at Lendlease, he has the right credentials to lead Star’s remediation program,” Ms Ward said.

Mr McCann replaces former chief executive, Robbie Cooke, who resigned in March before a second inquiry into the group’s Sydney casino operations began. Then-chairman Mr Foster temporarily took on executive duties.

The appointment comes two days after Star warned shareholders that an exodus of high-rollers, persistent cost-of-living pressures and rising remediation costs would further dent full-year earnings.

Star expects revenues of between $1.68 billion and $1.69 billion and earnings of between $165 million and $180 million for the year to June 30. It recorded $1.9 billion in revenue and $317 million in earnings last year. The downturn was mostly blamed on major declines in premium gaming revenue.

Mr McCann’s appointment is critical to the company’s strategy, but also to the fate of its Sydney casino licence. That hangs in the balance as an inquiry, led by Adam Bell SC, assesses whether Star had sufficiently changed its culture, secured adequate financial resources, and complied with its internal controls.

Hearings held earlier this year focused on three key issues: the falsification of welfare checks on customers; bulk approval of source-of-wealth checks for high-risk customers; and a $3.2 million loss from a so-called malfunctioning cash-in, cash-out terminal.

Mr Foster and Mr Cooke also came under intense scrutiny for exchanges about the casino group’s relationship with the regulator and special manager Nick Weeks. Mr Foster was ultimately pushed out by his board; the final report is due July 31.

Star said that it was not suitable to operate a casino in its own right, but believed it should be found suitable to run its Sydney precinct subject to conditions.

A spokesman for the NSW Independent Casino Commission, run by Phil Crawford, said it was encouraged by Mr McCann’s appointment. “Mr McCann’s experience in navigating the complexities of remediation will serve The Star well as it prepares for the challenges ahead,” he said.

Mr Haupt said he expected the Star would retain its Sydney casino licence under certain conditions with Mr McCann at the helm. “You would assume Steve would have done his due diligence and he’s worked with Crawford before,” he said.

“This is just a playbook. There’s low risk around it… This is extremely positive news.”

Mr McCann’s first two months in the position will be challenging.

In addition to the outcome of the NSW inquiry, Mr McCann will in August open the doors at the company’s newest precinct, Queen’s Wharf. He will also be required to introduce cashless gaming in Sydney by August 31 and needs to refinance Queen’s Wharf debt with Star’s partners Far East Consortium and Chow Tai Fook Enterprises before the end of the year.

Star is still bracing for a multi-million dollar penalty from the financial crimes watchdog for historic breaches of counterterrorism and anti-money laundering laws.

Star shares closed at 47¢.

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