Bell Report declares Star Sydney unfit to hold casino licence
A report released by the New South Wales Independent Casino Commission (NICC) from the Bell Inquiry into the operations of Star Sydney has found the casino unfit to hold a licence. Regulatory action towards the casino by the recently inaugurated watchdog is still pending, though “all options are on the table”.
The report, which was launched this year and was sparked by the review last year, looked into alleged breaches such as money laundering, organised crime links and fraud after 36 online hearings and testimonies from about 30 witnesses. The final report, written by Adam Bell SC, deemed Star Entertainment Group and some of its subsidiaries “presently unsuitable to be concerned in or associated with the management and operation of a casino in NSW”.
The report cited “systemic governance, risk and cultural failures” as the driving reason, with lots of instances to such effect. For example, the casino allowed the illegal use of China UnionPay cards to fund gambling, while misleading authorities about the process and knowing that it was a circumvention of Chinese laws. Mr. Bell also highlighted the company’s involvement with Suncity, the Asian junket operator, as well as the “serious misconduct” it committed in Salon 95. Another instance of gross systemic failures within the casino was its lacklustre response to independent audits of its anti money laundering (AML) and counter terrorism financing (CTF) controls, amongst others.
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According to Philip Crawford, Chair of the NICC, all of the illegal activities were carried out by senior management without the knowledge of the board or the involvement of the casino’s 8,000 employees.
“The report is, quite frankly, shocking. It provides evidence of an extensive compliance breakdown in key areas of The Star’s business,” he said.
“Not only were huge amounts of money disguised by the casino as hotel expenses, but vast sums of cash evaded anti money laundering protocols in numerous situations, most alarmingly through Salon 95 — the secret room with a second cash cage.
“The Star offered free alcohol to VIPs as an inducement to gamble and allowed vulnerable patrons to gamble continuously for more than 24 hours at a time without intervention.”
To the NICC chief, Star’s institutional arrogance and disregard for compliance is “breathtaking”. He continued that it is obvious that financial gain was the operator’s pursuit, and that fixing such a dysfunctional working culture would be no easy feat.
At the beginning of inquiry, Star gave eight submissions as to why it was suitable to retain an operating licence. The report disagreed with all eight. Star now has 14 days to respond to the report and a show cause has been sent asking why “disciplinary action should not be taken against it”. Disciplinary actions range from suspension or revocation of licence to fines or a combination of all.
Apart from deeming Star unfit to run a casino in NSW, the Bell Inquiry gave recommendations that mirrored those of the inquiries into similar allegations made against Crown Resorts. Among those include a ban on junket operators, close monitoring of customer accounts, and compulsory audits.
This is just the latest in a series of recent casino crackdowns in Australia. Inquiries into Crown and Star casinos prompted by investigative reports started a series of reforms to the industry in the country, with the formation of the NICC being a result of a recommendation by the Bergin Inquiry. Queensland and Western Australia have also followed in the cause of cleaning the casino industry in their jurisdictions.
Presently, The Star is no longer trading in the Australian Stock Exchange. According to the interim chairman, Ben Heap, the company is considering findings in the review and issues raised by the show cause and plans to respond in the next 14 days.
