Wide-ranging issues

The New South Wales (NSW) gaming regulator has concluded that Star Entertainment is unfit to hold a license for its casino in Sydney. The 36-day inquiry determined that Star helped to enable suspected money laundering, foreign interference, fraud, and organized crime. The Australian Stock Exchange-listed company is only beginning to fix its various failings.?

led to AU$900m (US$648m) worth of questionable transactions

Specifically, the inquiry heard how the Suncity junket operator that has links to organized crime was able to run an illegal operation at the casino. There was a disregard for laws governing the use of Chinese debit cards, which led to AU$900m (US$648m) worth of questionable transactions.?

Casino staff also allegedly lied to banks and did not fulfill their compliance obligations with respective regulators. There was even evidence that Star had taken covert measures in an attempt to avoid any public hearings. 

A lot to fix

During Tuesday’s closing submissions, Naomi Sharp, a member of the counsel assisting in the case, said: “We submit that the evidence in the public hearing establishes that the Star is not suitable to hold the casino license and that its close associate Star Entertainment is not suitable, either.”

She went on to explain that the inquiry into Star and its Sydney casino was only the beginning of their investigation. There still needs to be a concrete plan developed to outline the path that the casino operator has to take in order to become suitable once more for a license.?

Specifically, Sharp highlighted 26 areas that Star needs to address and reiterated that having a casino license is a privilege that gives the holder the opportunity to make “very substantial revenue.”

Numerous failings

Many of the issues with Star Sydney relate to the casino’s relationship with VIP gamblers. In one particular instance, a Chinese-born high roller was able to turn over more than AU$2bn (US$1.44bn) at the property despite casino staff having money laundering concerns. There was also evidence that casino staff gave false source of funds documents to the Bank of China.?

There were very serious failings in the company’s risk management department. Sharp laid the blame for the inadequate risk management at the feet of senior management, the board, and internal casino divisions. She also described some of Star’s legal practices as being of “significant concern” and unethical.?

there have been many changes to senior management

Since the beginning of the inquiry, there have been many changes to senior management. This includes the company’s chief executive, chief financial officer, chief casino officer, chief legal and risk officer, and the board chairman all departing their roles. The Star Sydney news comes just a day after rival Crown Resorts was hit with a record AU$80m (US$57.6m) fine in Victoria for failings at its Melbourne casino.