SYDNEY, June 25 (Reuters) - Star Entertainment Group's

shareholders approved on Wednesday an A$300 million

($195 million) rescue package that will allow the embattled

Australian casino group to remain operational, according to a

company presentation.

The rescue bid is being led by U.S. casino firm Bally's Corp

and the Mathieson family, which is Star's largest

existing shareholder.

The proposal put to shareholders at a Sydney meeting was

approved by more than 98% of investors' proxy votes, according

to company slides shown at the event that was live-streamed. A

final result of the vote will be announced later on Wednesday.

Australia's second-largest casino operator after Blackstone

-controlled Crown Resorts, Star has been struggling to

stay afloat amid a growing debt crisis and regulatory

investigations over the past two years.

The rescue deal consists of multi-tranche convertible notes

and subordinated debt instruments, and after the notes are

converted, Bally's and the Mathieson family will control around

56% of Star's issued capital.

Star chairman Anne Ward said the company had no other option

than to support the Bally's-led bid after interest from Oaktree

and Salters Brothers collapsed earlier this year.

"The strategic investments ... provide cash funding and

assist Star's ability to continue as a going concern, helping to

avoid outcomes such as voluntary administration, which is likely

not in the best interests of shareholders," Ward told the

meeting.

Star said in March it would sell half of its A$3.6 billion

Queen's Wharf project in Brisbane to Hong Kong companies Far

East Consortium International ( FRTCF ) and Chow Tai Fook

Enterprises for just A$53 million. It has also sold a theatre

attached to its main casino in inner-city Sydney as part of its

efforts to stay afloat.

Bally's owns 19 casinos across 11 U.S. states, according to

its website, and the Star investment is its first in Australia.

($1 = 1.5394 Australian dollars)

(Reporting by Scott Murdoch; Editing by Tom Hogue and

Muralikumar Anantharaman)