Star Entertainment Group has made a promise to make “urgent changes” in an effort to satisfy New South Wales regulators and keep its flagship Sydney casino license. The measures include new management at The Star Sydney, more checks on customers and doubling its financial crimes team.
Ben Heap, the company’s interim executive chairman – who took over the position after former CEO Geoff Hogg resigned this week – conceded that The Star had “not acted with the necessary urgency” and has “a lot to do to restore a constructive and open relationship” with the regulator, Australian Financial Review reported.
Geoff Hogg, former CEO.
The group promised “immediate actions” including a cultural overhaul as part of a two-year plan with 130 proposed changes. It hired 53 consultants in financial crime, risk and compliance who started work on Tuesday to coincide with the casino’s response to the NSW casino regulator’s “show cause” notice.
The NSW Independent Casino Commission pointed out that the casino group was still “institutionally arrogant” despite the four-month inquiry led by Adam Bell, SC, which found Star unfit to run its Sydney Casino. The company was given 14 days until Tuesday to explain why it should not have its license revoked or face fines up to AUD 100 million.
Heap stated that the group “accepted the findings of the Bell report, including the finding of unsuitability,” in his plea to the chief commissioner of the NICC, Philip Crawford. The Bell inquiry had found what it labeled serious failures of corporate governance and culture in its report this month.
Philip Crawford.
“The appropriate action NICC should take is to allow The Star Entertainment Group (TSEG) to continue to operate the license, under strict supervision and being held accountable to the milestones on the Remediation Plan,” Heap said, as reported by AFR.
The company’s remediation plan also includes technology upgrades for existing financial crime and safer gambling functions, reports IT News. The company intends to develop new systems as it transitions to compulsory carded play and cashless gaming under new casino laws.
Based on consultation with experts, the group also intends to deploy 15 extra facial-recognition cameras, increasing the size of its network from 55 to 70 devices. As reported by a spokesperson from the company, once it has secured regulatory approval, The Star will commence the use of facial recognition at The Star Gold Coast.
The company’s proposed cultural overhaul was categorized into nine work streams, with 48 specific initiatives and 130 milestones, which are intended to give NICC “confidence that TSEG has restored suitability,” Heap wrote, and added that he expects the remediation plan will be completed by the end of 2024.
Of those milestones, eight have already been met and another 29 will be completed by the end of the year, Heap pointed out. The board will finalize the budget for the plan over the next month following feedback from the NICC.
To strip The Star of its license is a possibility still on the table, according to Crawford. The regulator has not set a timetable to respond to the Star’s letter. The company’s shares edged up 1.1% on Tuesday after a 30% drop that took place since the Bell inquiry kicked off in February.
The Star Casino Gold Coast.
In addition to a potential license removal, The Star could face fines as high as AUD 100 million, and a manager could be appointed for 90 days. The manager could have the ability to determine the “net earnings” The Star shareholders could make from the casino for the duration of the suspension.
Even though these are tough times for the company, analysts consider the permanent loss of its flagship Sydney casino license – the worst case scenario – to be unlikely, AFR added.
Around 25 of the 53 new consultants will work for the financial crimes team, effectively doubling the headcount of the unit to 56, boosting The Star’s compliance with anti-money laundering laws. The remaining 28 consultants will work on safer gambling, risk and compliance functions.
The Star Entertainment Group will hire an executive team to exclusively manage and run its flagship Sydney casino as part of its two-year plan to overhaul the business after the scathing Bell report. The Sydney executive team includes two new posts – a NSW compliance officer and chief risk officer – and will eventually be led by former Commonwealth Bank executive Scott Wharton, who was appointed chief executive officer of Star Sydney in June.
Heap said temporary appointments to these roles had been put in place and by October 31 the Star would have an independent compliance committee, as recommended in the Bell report.
Former CEO Matt Bekier.
The Bell inquiry led to the loss of five executive jobs – those of former CEO Matt Bekier, chief financial officer Harry Theodore, chief legal and risk officer Paula Martin, NSW chief casino officer Greg Hawkins and chairman John O’Neill – as well as senior managers from its legal and finance teams.
Michael Issenberg, Anne Ward and David Foster have been appointed to replace these board members. The company has also appointed a new chief risk officer, company secretary, and acting general manager. All need regulatory approval.
The Star also told the NICC it had beefed up its whistleblower policy to encourage staff to report misconduct. The new whistleblower hotline will be live by November 30.
Heap will remain in his position until appointed CEO Robbie Cooke, who is current boss of Tyro Payments, joins the company. The change of guard came a day ahead of the letter pledging The Star was committed to change.
Original article: https://www.yogonet.com/international/news/2022/09/28/64422-the-star-promises-to-make–34urgent-changes-34-in-effort-to-retain-its-sydney-casino-license
