April 7 (Reuters) - Australia's Star Entertainment

has agreed to a refinancing deal that would see U.S.

peer Bally's take control of the embattled casino

operator, the Australian Financial Review (AFR) reported on

Monday.

Under the deal, Bally's will invest about A$250 million

($149.8 million) while Star's largest shareholder, billionaire

Bruce Mathieson, would provide more than A$50 million, the AFR

reported, citing three sources with knowledge of the matter.

Star and Bally's did not immediately respond to a request

for comments.

Sydney-based Star, Australia's no.2 casino operator, has

been

scrambling

to stave off bankruptcy as years of regulatory scrutiny and

lawsuits following money laundering allegations have left it

cash-strapped and with limited lifelines.

Its shares remain suspended from trading on the

Australian Securities Exchange as it continues to be unable to

lodge its half-year results in the absence of an appropriate

refinancing proposal.

($1 = 1.6694 Australian dollars)