Star handed AUS$100m penalty and indefinite NSW licence suspension
Last month, Star was declared unsuitable to hold a casino licence in New South Wales after Adam Bell SC’s report outlined a host of anti-money laundering and social responsibility failings at Star Sydney stretching back for years.
An incomplete list of the misconduct included successful attempts to circumvent Chinese capital flight laws by deceptively reclassifying gambling spend as hotel expenses on China Union Pay (CUP) cards, lying to banking institutions regarding these payments and allowing an entity with likely links to organised crime to conduct cage operations in its casino.
Star was given 14 days to respond before disciplinary action was taken and its interim chair Ben Heap set out its immediate priorities days later, saying Star needed to “fundamentally transform its culture”, pledging greater transparency, more robust governance, and greater accountability.
The NSW Independent Casino Commission (NICC) has now decided on a suitable course of action for the operator, including that the operator will be required to pay a penalty of $100m. Star’s licence in the state will also be suspended indefinitely from 21 October.
In a letter to Star, the NICC said that by suspending, rather than cancelling, the licence, Star may be able to satisfy that with the appropriate remedial action, it may be able to resume legal gambling activities in New South Wales.
One of the stipulations for this is the appointment of an NICC-approved casino manager for Star Sydney, with Nicholas Weeks to assume this role from 21 October. This will allow the casino to remain operational during the period of licence suspension.
Weeks will have full control of and responsibility for Star Sydney and will work closely with management of Star to manage the operations of the venue as a going concern with regards to the matters identified in the Bell Report.
The NICC said Weeks will also ensure matters identified in the Bell Review are adhered to in order to address the integrity of the casino. The casino’s progress will be monitored during the period of suspension to see if it becomes suitable to hold a casino licence, after which the suspension may be lifted.
“It can also be anticipated that the period during which the manager has control will enable the exploration between the NICC and the operator and Star of the possibility that the former operator may be capable of demonstrating to the NICC it may become suitable to hold a casino licence,” the NICC said in the letter.
“We expect that the manager’s views will be sought by the NICC in relation to this matter.”
In relation to the disciplinary action. Star today (17 October) requested an immediate trading halt to its ordinary shares on the Australian Stock Exchange (ASX).
Star said the trading halt is necessary as otherwise trading in securities may take place in an uninformed market. It is anticipated that the halt will remain until 19 October.
The latest blow to Star comes after the operator was this month also found “unsuitable” to hold a licence in Queensland, following an inquiry into its operations in the state.
The review, which was announced in June, examined a range of issues and unearthed a host of institutional failings that were similar to those listed in the Bell Report.