A damning report has been issued on The Star casino, branding it “unsuitable” to hold its licence in light of a litany of breaches and continued arrogance.
The much-anticipated report comes only weeks after the government pushed through new laws in response to the recent Bergin inquiry into Crown casinos, establishing the new Independent Casino Commission and increasing financial penalties.
Released this week through the Commission’s chief commissioner, Philip Crawford, it follows an inquiry addressing allegations of money laundering, organised crime, fraud and foreign interference, finding widespread misconduct at the casino over the past decade.
The 946-page report, led by Adam Bell SC, identified specific breaches of the Casino Control Act and The Star’s own internal control policies.
It found the operators had deliberately misled the regulator and its banks, may have evaded taxes, permitted junket operator Suncity to operate at the casino despite criminal allegations, and allowed the “inherently deceptive and unethical” dealings by China UnionPay to continue, reportedly facilitating $900 million of illegal gambling transactions.
In all, the final report contained 30 recommendations – including suggestion a compulsory gaming card be introduced for the casino to keep its licence. This could be mandatory for all gambling at the casino, aiming to ensure “that patrons are identified and their exclusion status (if any) enforced”.
While primarily cited in the pursuit of harm minimisation and responsible gambling, Bell suggested carded play would have further benefits in combatting money laundering, and that cash should be banned for gambling at the casino.
Star Entertainment made multiple submissions to the inquiry on its suitability to hold a licence, but Bell reportedly did not agree with any.
The Commission is understood to be considering all available options, which could include revoking Star’s licence to operate casinos in NSW, or fines of up to $100 million, but consideration will be given to the impact punitive measures might have on the casino’s 8,000 employees and the wider community.
Crawford referred to the “astounding” level of what is deemed institutional arrogance at the company, and a continued unwillingness to demonstrate appropriate transparency, stating that “doing nothing is not an option”.
The commissioner criticised the board of directors, who are said to generally have “no clue” of activities inside the casino operation, and are thus failing in their duty of care.
He described the lengths management employed to hide bad behaviour as “quite confronting”, and a tendency to ignore risks associated with their conduct, particularly around extensive money laundering and criminal patronage, and infiltration by organised crime.
There has also been “scant regard” given to harm minimisation criteria, prompting the recommendation of the compulsory gaming cards.
“They need to demonstrate that they understand what their problems are, and show some leadership in fixing those problems,” said Crawford.
“At the moment, we’re not getting that vibe. In fact, we still have inspectors, investigators down there very frequently.
“And I’m afraid the cultural arrogance, the institutional arrogance hasn’t changed much.”
Kevin Anderson, NSW minister for hospitality and racing, was equally damning of what he described as the “toxic culture that has been operating with Star”.
He was also critical of both the state government and regulator for allowing the issues revealed on their watch, but stopped short of confirming if all recommendations from the Bell report would be adopted.
There is also a confidential portion of the report. Police are said to be conducting criminal investigations on individuals regarding a range of issues, in regards to breaches of the Casino Control Act.
Star has already seen some extensive house-cleaning. During the inquiry CEO Matt Bekier stepped down, replaced in June by former Tatts CEO Robbie Cooke, after veteran and former chairman John O’Neill took over, before also resigning.
Also gone are CFO Harry Theodore, chief legal officer Paula Martin, and NSW casino boss Greg Hawkins, while directors Sally Pitkin, Katie Lahey, Gerard Bradley and Richard Sheppard have each either left or committed to resigning.
Star Entertainment has been issued with notice to ‘show cause’ and given 14 days to respond. The Commission will not act before then.
Star issued a statement Tuesday on the ASX, offering that it was considering the report and the matters raised.
