Star Entertainment (ASX:SGR) share price lifts despite news execs may face public hearing

Casinos across Australia have come under increased scrutiny.

| More on:
heavy lifting, lifting index, carrying weight, boy lifting dumbbell above his head

Image source: Getty Images

The Star Entertainment Group Ltd (ASX: SGR) share price is charging higher today, up 3.7% to $3.63 per share.

The wider market is having a good run too, with the S&P/ASX 200 Index (ASX: XJO) up 0.5% at time of writing. A second day of gains for the index.

Star Entertainment’s share price boost today comes despite news that its executives could still face a public hearing.

What’s all this about a public hearing?

The Star Entertainment share price has come under tremendous pressure over the past 9 days, tumbling a gut wrenching 30% from 6 October through to the end of trading this Tuesday, 12 October.

This, as my Foolish colleague Marc Sidarous noted earlier in the week, came “after a joint investigation by the Sydney Morning HeraldThe Age, and 60 Minutes aired explosive allegations of money laundering, facilitating organised crime, fraud, and foreign interference at its casinos”.

Since the closing bell on Tuesday, the Star Entertainment share price has rebounded 13%, though shares remain down 21% from Tuesday’s close.

Today, investors appear to be shrugging of concerns of a potential public hearing on the legal matter, one that could pull in the company’s executives.

Chris Sidoti served as the chairman of the New South Wales Independent Liquor and Gaming Authority (ILGA) from 2008–2016.

As the Australian Financial Review reported this morning, Sidoti believes that Adam Bell, the investigator reviewing Star’s Sydney casino licence, could haul in the company’s top brass for a public hearing over the damning allegations.

According to Sidoti:

The terms of reference on the authority website do not lay down any process for the review and so my assumption is that Mr Adam Bell, SC, can conduct it in any way he wishes. If he wants to hold public hearings, then it seems to me that he is free to do so. That’s as it should be. It’s not a matter for the Premier or the minister or even the authority.

An ILGA spokesperson contacted by the AFR for comment wasn’t overly forthcoming, saying only, “If the Independent Liquor & Gaming Authority receives any recommendation from Mr Bell that any public hearings are required, it will give such a recommendation appropriate consideration.”

Star Entertainment share price snapshot

Having been hammered by the selloff earlier this week, the Star Entertainment share price remains down 3.5% year-to-date. By comparison the ASX 200 is up 10% so far in 2021.

Over the past month, Star’s shares are down 14%.

Should you invest $1,000 in Star Entertainment right now?

Before you consider Star Entertainment, you'll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Star Entertainment wasn't one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Consumer Staples & Discretionary Shares