The New South Wales Casino Commission’s report on the Star Entertainment Group’s business activities has declared that the company is unfit to operate a casino in Sydney.
Report finds that the cultural, institutional arrogance hasn’t changed following the inquiry
Speaking of the report, Philip Crawford, the Commission chief, said the report made for “sad reading” and highlighted Star Entertainment’s “scant regard” for the minimization of gambling harms. In a statement he said:
“The institutional arrogance of this company has been breathtaking. And their willingness to take risks in pursuit of financial goals has been appalling. Our major concern with regard to the Star remains its culture. There doesn’t seem to be any short-term fix.”
He went on to note that Star had allowed money laundering and organized crime to become commonplace at the casino, and took “deliberate steps” to hide their illegal activities from regulators. Crawford even stated that the Commission has discovered that some of the illegal activity continued after the public inquiry began.
“They tended to ignore the risk inherent in all of their conduct, and then they tried to hide their conduct. Financial goals seemed to have been the main driver of their conduct.”
The report stated:
“A number of extremely serious governance, risk management and cultural failures of The Star Entities occurred” during and before the period being reviewed.
The failure to report in relation to CUP (China Union Pay) and the serious misconduct by (junket operator) Suncity in Salon 95 was a manifestation of a culture where business goals took priority over compliance goals.
The Star treated the (NSW Independent Liquor and Gaming) Authority with disdain, as an impediment to be worked around.
The Star misled the Authority about the CUP Process and about Salon 95.”
According to the report, there are no recommendations as to what changes Star can make to become a suitable casino operator. However, it does state that the casino operator has 14 days to respond to the report’s findings.
Crawford said that Star has admitted at the start of the inquiry that it was unsuitable to hold a casino license but that it had made eight submissions as to why it was now a suitable operator. However, the report found that none of those submissions were acceptable reasons to review the Commission’s opinion that Star should not be allowed to operate a casino in Sydney.
Speaking of the individual directors and board members, Crawford said:
“(The report) finds them well meaning people, well credentialed, but at the end of the day they didn’t have a clue what was going on in their own company, as such they really weren’t doing their job.”
He noted that those responsible for the illegal activities made significant efforts to cover their tracks:
“Then they took deliberate actions to mislead and deceive their own bank, their own board of directors and the regulator.”
Crawford said that it had taken Crown over 18 months to rectify its issues identified by the Bergin Inquiry and to satisfy the regulator that it was a suitable operator. He feels that it will take Star a similar length of time to address its issues.
“We still have inspectors/investigators down there very frequently. I’m afraid the cultural, institutional arrogance hasn’t changed much, there is still an unwillingness to show the right level of transparency.”
Hospitality and Racing Minister Kevin Anderson said he would accept the recommendations of the report but would give Star an opportunity to respond first.
“It is disgraceful and we are outraged as to the operations of this particular company. The flagrant disregard for the rules and regulations they should be operating under is breathtaking. The people of NSW expect casinos should operate at the highest standards; it’s very clear that Star has not been doing that. To be able to still operate on a day-to-day basis while undertaking deceptive conduct is outrageous.”
In a statement to the Australian Stock Exchange, Star’s interim chairman Ben Heap said the company is reviewing the report’s findings and would respond within 14 days.
The news follows recent revelations that a Queensland government inquiry found that Star had disguised AU$55 million (€38.09 million) in gambling funds from Chinese high rollers as room and entertainment charges.
Image credit: llee_wu / CC BY-ND 2.0
Olivia has worked as an editor and writer for major brands across multiple niches. She now focuses on the iGaming and sports betting industries.