The Star Entertainment Group Ltd (ASX: SGR) share price crashed 26% in the first 30 minutes of trade on Tuesday after coming out of a trading halt.
Star Entertainment shares opened at 45.5 cents, down 18.75% on Friday's closing value of 56 cents.
The casino operator's stock then quickly fell to an intraday trough of 41.5 cents.
This is a new 52-week low and represents a 25.9% dive on yesterday's close.
The Star Entertainment share price is currently at 43.5 cents.
Let's recap what's happening.
Why is the Star Entertainment share price tanking?
As we reported, Star Entertainment shares went into a trading halt yesterday at the company's request.
The casino operator advised the ASX that it had received news from the NSW Independent Casino Commission (NICC) that a second inquiry into its suitability as a casino operator will be held.
The inquiry commenced yesterday and will run for approximately 15 weeks. A final report is due 31 May.
After the market close yesterday, The Star issued a statement saying:
The NICC has informed The Star that the purpose of the Inquiry is to assist the NICC in forming a view as to what, if any, action the NICC should take in respect of The Star Sydney Pty Ltd (The Star Sydney) prior to the end of the manager's appointment on 30 June 2024.
Star's statement included the inquiry's full terms of reference but no further comment from the company.
The NICC announced yesterday that Adam Bell SC, who conducted the first inquiry, would run the second one. The first inquiry found The Star unsuitable to hold a casino licence in 2022.
In October 2022, Star Entertainment's gaming licence in NSW was suspended and it was fined $100 million.
The NICC appointed Nicholas Weeks as independent manager to determine if The Star could address and remediate the findings of the first inquiry and achieve suitability status again.
The NICC has extended Weeks' term twice and clearly doesn't think The Star is moving fast enough.
NICC chief commissioner, Philip Crawford, commented:
There was a substantial shift required and The Star has had 18 months to demonstrate that it has the capability and resources to regain its casino licence.
The NICC has had concerns about the extent that remediation is attributable to the manager's oversight and direction versus what is being driven by The Star's reform agenda.
Bell Two will bring us back to the Bell Report and The Star's efforts to regain its casino licence in the shadow of that report.
Crawford warned The Star:
There is much at stake for The Star, so the NICC is giving the casino every chance it can to demonstrate whether it has the capacity and competence to achieve suitability.
This includes meeting its financial obligations under the casino licence and funding its remediation program sufficiently.
The inquiry will provide the NICC with the information needed to make an important decision for The Star, its employees, its stakeholders and the wider community.
