Star Sydney facing $100m fine as corruption ruling looms
The Star Sydney will likely be fined a record $100 million by the NSW Independent Casino Commission (NICC) after an incriminating probe into the company’s affairs. The organization was found to be allowing criminal activity as well as money laundering within its gaming venue.
The Star Entertainment Group received and accepted last month the findings of the inquiry led by Adam Bell SC, which declared the company unfit to own a casino licence in NSW. The report was made after the Sydney Morning Herald’s investigation sparked a public inquiry into the company.
The investigation alleged that the gaming venue had been involved in suspected money laundering, large-scale fraud, organized crime, and foreign interference for several years. This was done while Sydney’s Star Casino board was warned that controls for money laundering were failing.
When the inquiry’s findings were published last month, the NICC chief commissioner, Philip Crawford, accused the organization of exhibiting “breathtaking institutional arrogance”.
Crawford revealed that while a large part of the casino’s staff was on the right path, cultural failures, as well as systemic governance and risk, had been discovered during the inquiry.
“The report is, quite frankly, shocking. It provides evidence of an extensive compliance breakdown in key areas of The Star’s business,” Crawford 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 NICC chief revealed that the company’s senior staff hid most of the activities instead of ousting them as they should have. The gaming venue patrons were also exposed to “gambling harms” in a number of instances.
“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,” Crawford said.
“These personal accounts are jarring and illustrate how unrestrained gambling can go from entertainment to exploitation.”
In August, the NSW government issued new laws which stated that board members, as well as senior casino executives, were held accountable for misdeeds that they had knowledge of but failed to put an end to.
Crawford disclosed that his new regulator would issue “very severe consequences” in cases of misconduct. The Chief Commissioner promised to be more vigilant in their approach and utilize the several available tools in the process.
“The ability of casinos to hide things from us, which they’ve actively done in recent years, will not be available to them,” Crawford said.
The report listed 30 recommendations for the gaming company to rectify the identified issues. Star Entertainment Group responded by promising to do “whatever necessary” in order to restore the organization’s suitability as a gaming operator.
The casino group also brought in an independent monitor and underwent a cultural overhaul. Star Entertainment reportedly took “significant and urgent remedial steps” upon receiving the report, including upgrading surveillance and ceasing junkets. The company also has a newly developed multi-year plan.
Matt Bekier, Star Entertainment’s former chief executive, stood down at the time of the public inquiry along with several senior executives. Geoff Hogg, the acting chief officer, also resigned last month. Robbie Cooke, the new CEO, will start in his new role on Monday, in time for the NSW’s penalty announcement.
Earlier this month, Cooke spoke on the Bell inquiry and admitted that the revelations felt “confronting”. He promised that in his new role, he would ensure that the company underwent the required rehabilitation and restoration to get up to standard.
“The business had lost its way in a number of areas, but I’m committed to rehabilitating it and restoring the group to suitability [to hold its casino licences],” the new CEO said.
A fine of $100 million is the highest possible penalty that can be issued by the NICC under the new state laws. While the fine will be tasking to pay off, it will help the gaming venue retain its license, however, with possible conditions.
The amount is considerably higher than the $80 million fine given to Crown Resorts earlier this year by Victorian gaming authorities.
