The NSW Independent Casino Commission (NICC) has fined Star Entertainment AUD 100 million ($62.7 million) and appointed Nick Weeks of Wexsted Advisors as manager, to take control of the company’s Sydney casino for at least 90 days. The move comes in response to a damning inquiry into the casino’s operations that heard allegations of money laundering, fraud and criminal activity.
The Star’s license to operate its Sydney casino will be suspended from Friday. The Star Casino will be able to continue trading under the manager’s license during the period in which Weeks will be in charge, but the regulator’s chair Philip Crawford stated it “could take longer to restore the casino to suitability,” reports ABC Australia.
The regulator has defended its decision to allow the operator to keep its license after finding it unfit to hold it due to breaches including facilitating money laundering by customers and allowing a junket operator linked to organized crime to bring in high-rolling gamblers.
Crawford stated the regulator decided not to revoke Star’s license as the company had shown willingness to reform under the new chief executive Robbie Cook. He also pointed out that taking the license away would have resulted in thousands of employees losing their jobs overnight, reports The Guardian.
The company said it has developed a comprehensive, multi-year plan with 130 milestones to meet over two years, including permanently exiting junkets; increasing risk, compliance, and security staff; and making changes to leadership.
“If it were not for The Star’s change in attitude and our belief that it is in the public interest to protect the thousands of jobs at risk, there might have been a different outcome,” Crawford said, as reported by ABC.
The announcement coincides with the first day on the job for Star’s Robbie Cooke. Crawford said he was hopeful the new chief executive could apply his experience and leadership to guide the company toward suitability.
“We didn’t have much confidence in that, after the Bell review, but we’ve now met Robbie Cooke, and we’ve seen that letter, and [Star chairman] Ben Heap is leading the board in a way that shows contrition,” Crawford said.
The AUD 100 million fine is the maximum penalty under new casino regulation laws introduced by the NSW government in August. The Star announced in a statement to the ASX that it will pay the fine “on a timetable yet to be agreed by NICC”, and acknowledged its license “will be suspended indefinitely.”
Philip Crawford.
The company also noted Week’s position as a manager is to run the casino in a way that is “broadly consistent” with the manner in which the former casino operator operated the casino, except when it is “necessary” or “appropriate” to make changes that will “address matters identified in the Bell Review.”
The Guardian cites Charles Livingstone, a gambling researcher at Monash University and a longstanding critic of Australia’s casino industry, as stating that the fine imposed on the company was “not enough to dissuade this kind of behavior.”
He also pointed out that a similar AUD 100 million fine recently imposed on Crown Resorts by Victoria’s casino regulator was factored into the price that US private equity group Blackstone paid to take it over. “They didn’t blink. What do you have to do to lose a license?” he noted.
Australia’s casino industry has been the subject of multiple inquiries around the nation since 2019 when Nine Entertainment revealed money laundering and criminal infiltration of junkets at Star’s rival, Crown Resorts.
Crawford has now remarked on the company’s behavioral changes and described it as “a huge change.” In the past, they’ve been “very adversarial and not really treated the regulator with the respect that they should have,” he noted.
Dominic Perrottet.
The New South Wales premier, Dominic Perrottet, welcomed the decision by the regulator and said he did not expect the company’s license to be renewed until the casino was compliant. “We’re not going to have a situation where any corporation in our state does not follow the rules and regulations that are in place,” he stated.
He also noted that this demonstrates that the processes that are currently in place are “incredibly strong, that we have a strong regulator and the decision today I welcome.”
Star will also have to take action before Queensland regulators as the state’s attorney general declared the company was unfit to hold a casino license there after an inquiry found it had breached its anti-money laundering duties.
The Queensland government also introduced a legislative change to allow it to appoint a special manager to run Star’s Gold Coast and Brisbane casinos, but that power has not yet been used.
Original article: https://www.yogonet.com/international/news/2022/10/17/64651-australia-nsw-regulator-to-suspend-the-star-39s-sydney-license-impose-record–62m-fine
