Star Entertainment issued show-cause notice by OLGR

Scandal-riddled casino operator Star Entertainment Group has gotten into trouble again, this time with the Office of Liquor and Gaming Regulation (OLGR) in Queensland.

The gaming company’s New South Wales casino was reviewed recently, and several anti money laundering (AML) breaches were uncovered. Star Entertainment is also under fire for its Queensland casinos and was issued show-cause notices regarding operations at The Star Gold Coast and Treasury Brisbane casinos.

A review – led by former judge Robert Gotterson – on the Australian casino and hospitality giant was concluded last month, and several institutional failings were uncovered. Among other charges, the inquiry found evidence that the company was guilty of facilitating money laundering through its Queensland casinos.

This prompted the state government to declare that Star Entertainment was “unsuitable” to maintain its gambling licence. The Attorney-General of Queensland, Shannon Fentiman, was behind the subsequent issuance of the show-cause notice.

Per the notices, the company’s two gaming properties in Queensland were given three weeks to explain their shortcomings. The establishments were also to provide reasons to hold off the implementation of enforcement action against them. The deadline for handing over the justification is November 25.

Fentiman commented on the findings and explained that it was essential to avoid pre-empting the show-cause notice outcomes. She further said that the new legislation put in place a range of disciplinary options for the government to make use of. Some of these are appointing a special manager and increasing fines to as much as $100 million.

“The Gotterson Review highlighted major failings in the Star’s operations at The Star Gold Coast and Treasury Brisbane casinos. The notices issued today provide these entities with the opportunity to show cause as to why disciplinary action should not be taken against them,” Fentiman said.

“While it is important that we do not pre-empt the outcomes of these show-cause notices, new legislation ensures the government has a range of disciplinary options available following that process.”

Under current Queensland law, if Star Entertainment fails to provide sufficient evidence to debunk the Gotterson Review’s claims, the disciplinary action taken could range from written directions and a letter of censure to a penalty of up to $100 million. Despite finding similar reports after probing, other state regulators previously allowed both Star and its rival casino operator, Crown Resorts, to carry on operating. Queensland may go down the same route.

The state government could also appoint a special manager to be in charge of the gaming establishment as well as its new Queen’s Wharf development. This is similar to the treatment of Crown Resorts in Victoria and Western Australia, and Star in New South Wales after inquiries.

The Gotterson Review was initially announced in June and was prompted by the Bell inquiry into Star’s NSW venue. That review declared The Star Sydney unfit to hold a casino licence and issued a $64 million fine as a result.

Despite those sanctions, the NSW casino was still allowed to operate, albeit under the supervision of a manager appointed by the NSW Independent Casino Commission (NICC). Star’s licence in NSW may also be suspended or cancelled.

The Bell report revealed that the casino had misled regulators and banks concerning illegal China UnionPay transactions. Star Entertainment’s NSW branch was also accused of facilitating organised crime and having dealings with junket operators.

The organisation was shown to be inadequate when its existing social responsibility, counter terrorist financing, and anti money laundering strategies were reviewed.

At the moment, the OLGR is investigating Chow Tai Fook. The Hong Kong-based conglomerate is a major shareholder in Star Entertainment’s two establishments in Queensland.

Authorities suspect Chow Tai Fook of being associated with organised crime and will determine if the company is suitable to hold a significant shareholding position in the casinos. Fentiman revealed that she would announce the inspection findings at a later date.

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