Star Entertainment Group unfit to hold casino licence
Star Entertainment Group has been deemed unsuitable to run a casino and now has just 14 days to prove to NSW authorities why it should be allowed to keep its operating licence.
The Bell inquiry this week delivered its final report into Star’s operations and its findings were damning to say the least, accusing Star of setting up an “inherently deceptive and unethical process”.
The report shows the entertainment giant disguised more than $900 million as hotel expenses, which enabled Chinese high rollers to bet at the venues. The group also failed to check the source of gambling money being filtered through its casinos and knew it had breached rules without reporting those breaches.
Further to this, Star was found to bring major international gamblers to the country instead of shutting down junkets.
The report was scathing of Star’s executives noting, “a collective decision by the senior management … which reflected a culture in which business goals were given undue priority over regulatory and money laundering and terrorism financing risks”.
The regulator will now decide appropriate penalties including licence cancellation and a $100 million fine.
“How severe, we are not sure,” Philip Crawford, the chief commissioner of the state’s casino regulator said as he released the Bell report.
“They need to demonstrate, to understand what their problems are and show leadership in fixing those problems … At the moment we are not getting that vibe.
“I’m afraid the cultural, institutional arrogance hasn’t changed much; there is still an unwillingness to show the right level of transparency.”
Star is the latest casino operator to be raked over the coals after Crown Resorts faced three royal commission-style inquiries. Similarly, to Crown it will also face multiple investigations including into operations in Queensland.
Star’s interim chair Ben Heap said the casino operator said it was considering the report and the matters raised and will have to answer accusations of systemic governance, risk and cultural failures at the Sydney casino.
Apart from cultural flaws, the group will have to address was a system that enabled Star’s Macau office to provide false documentation to disguise deposits by patrons as deposits of The Star.
“The false letters gave rise to a high risk of money-laundering as they obscured the source of funds … This practice revealed a complete disregard of (anti-money laundering) obligations by senior employees,” the report reads.
Further to this, patrons were allowed to swipe Chinese credit cards at the Astral Hotel “in order to fund gambling”.
“The value of the transactions via the (use of China Union Pay cards) at The Star totalled $908 million … Management of The Star and Star Entertainment were aware (this) was a means of circumventing Chinese capital flight laws.”
Star’s directors are accused of being ignorant of systemic problems within the group.
Crawford concluded they “didn’t have a clue about what was going on in their own company”.
“As such they really weren’t doing their job.”
Star now faces all manner of sanctions.
“All I can say this morning is they’re all on the table,” Crawford said.
Irit Jackson, 14th September 2022
