By Savyata Mishra

(Reuters) – Shares of Star Leisure Group fell to a report on Tuesday, extending losses after the Australian agency warned of an as much as A$1.6 billion ($1.11 billion) hit to half-yearly earnings from a proposed on line casino obligation fee hike in New South Wales (NSW).

Australia’s second-biggest on line casino operator has misplaced about half, or A$1.04 billion, in market worth since NSW unveiled the plan on Dec. 19, compounding issues for an business that has already been dogged by reviews of shirking anti-money laundering guidelines, dysfunctional governance and poor company tradition.

Shares of the on line casino operator fell 11.6% to an all-time low of A$1.313 after Monday’s close to 21% plunge, whereas the broader market was buying and selling about 0.4% greater.

Star Leisure mentioned on Monday the obligation hike proposal was seen considerably impacting the profitability of Star Sydney and that it will overview the belongings. Sydney operations accounted for half of the group’s income in fiscal 2022.

Analysts are baking in an extra A$100 million hit per 12 months for Star if the levies come into pressure.

Star Leisure’s enterprise in Sydney has been dealing with a number of challenges, together with working restrictions from mid-September and elevated competitors from greater rival Crown Resorts.

Crown Resorts, purchased out in a $6.3 billion acquisition by personal fairness large Blackstone (NYSE:) Inc, opened its gaming flooring to gamblers and high-rollers in August after the NSW regulator granted it a licence.

“We estimate Star Sydney will lose round 20% of its desk gaming enterprise, and greater than half its VIP gaming enterprise to Crown inside three years,” Morningstar analyst Angus Hewitt mentioned in a observe.

Underneath stress to carry Star Sydney’s efficiency, the group introduced a slew of initiatives on Monday that included loyalty advantages and pricing actions to sort out competitors stress, and cost-control measures.

The group additionally forecast annual underlying earnings earlier than curiosity, taxes, depreciation and amortisation that missed Factset consensus of A$446 million.

($1 = 1.4355 Australian {dollars})