NSW’s casino regulator has defended his decision to allow Star Entertainment to keep its licence, despite finding it wasn’t fit to hold it due to breaches including facilitating money laundering by customers and allowing a junket operator linked to organised crime to bring in high-rolling gamblers.
The NSW Independent Casino Commission on Monday fined Star $100m and appointed a manager, Nick Weeks of Wexsted Advisors, to take control of the company’s Pyrmont casino for at least 90 days.
NSICC’s chair, Philip Crawford, said the regulator decided not to revoke Star’s licence because the company had shown contrition and a willingness to reform under the new chief executive, Robbie Cook, and because taking away the casino licence would have meant “thousands of Star employees would have lost their jobs overnight”.
“A big issue for us, to be frank, in this environment is that there is probably about 10,000 employees of the Star casino, and a lot of them rely on the income to pay their mortgages and raise their kids,” he said.
Charles Livingstone, a gambling researcher at Monash University and a longstanding critic of Australia’s casino industry, said the penalty was “not adequate”.
“One hundred million is a lot of money for anybody, but for a casino – it’s more than a slap on the wrist but it’s not enough to dissuade this kind of behaviour.”
He said a similar $100m fine recently imposed on Crown Resorts by Victoria’s casino regulator was simply factored into the price that US private equity group Blackstone paid to take it over.
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“They didn’t blink,” he said. “What do you have to do to lose a licence?”
He said it was remarkable that no one had so far been held personally legally accountable for Star’s conduct.
“If we committed the equivalent as private citizens we’d be in the big house, but no one seems to be held accountable,” he said.
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 bigger rival, Crown Resorts.
In September, an inquiry run for the NICC by the senior counsel Adam Bell found that Star was unsuitable to hold a casino licence.
Bell found that Star staff ran a scheme that allowed $900m in gambling transactions to be disguised as other spending by customers using China UnionPay cards and when challenged on it by NAB, Star gave the bank a “brazenly and deliberately misleading” response.
The company also allowed junket operator Suncity to run a high-roller room known as “Salon 95”. Suncity was controlled by Alvin Chau, who is on trial in Macau on charges including illegal gambling, criminal association, fraud, and money laundering.
Bell said Star should have shut Salon 95 in June 2018 due to escalating concerns over cash transactions in the room but instead kept it open.
“This was a collective decision by the senior management of the Star, which reflected a culture in which business goals were given undue priority over regulatory and money laundering and terrorism financing risks,” he said in his report.
Bell also raised concerns about the attitude of management towards his inquiry, including by making claims that important documents should not be handed over because they were subject to legal privilege.
However, on Monday, Crawford said that after a flurry of resignations from the company, including the departure of the chief executive, Matt Bekier, the company had now “shown contrition and wants to work with us”.
“That’s 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 said.
The New South Wales premier, Dominic Perrottet, welcomed the decision by the regulator and said he did not expect Star’s licence 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 said. “What today clearly demonstrates is that the processes that we have in place are incredibly strong, that we have a strong regulator and the decision today I welcome.
“My expectation is that obviously the licence won’t be renewed until circumstances are in place where they comply, and that’s what they should be doing.”
Star’s next hurdle is dealing with Queensland regulators. Earlier this month, the state’s attorney general declared the company was unfit to hold a casino licence after an inquiry found it had breached its anti-money laundering duties and deliberately misled the regulator.
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. The company has been issued with a show cause notice to explain why it should be allowed to continue to operate in Queensland.
Livingstone said the rolling inquiries showed that a national casino regulation regime was needed.
“It’s a national-level industry, it needs to be regulated nationally by a national-level regulator,” he said.
• This article was amended on 17 October 2022. An earlier version said a special manager had been appointed to run Star’s Gold Coast and Brisbane casinos; while a legislative change provides for that role, an appointment has not yet been made.
