Star’s ‘please explain’
Gaming group faces possible $100m fine from regulator
The NSW Independent Casino Commission has issued a show cause notice against troubled gaming group The Star Entertainment Group that could result in a $100m fine and the loss of its Sydney casino licence.
The Star has been suspended from trading for two weeks as chief executive Steve Mccann struggles to convince financiers to sign off on a much-needed cash injection amid cost overruns at its new $3.6bn Queen’s Wharf project in Brisbane.
The Star is also seeking tax relief from both the Queensland and NSW state governments in a bid to keep its doors open. Queensland Premier Steven Miles confirmed last week his government was in talks about possible deferral of tax payments to protect almost 3000 jobs at the just opened Queen’s Wharf.
The NICC said the notice seeks a response as to why the regulator should not take disciplinary action against Star in respect of breaches substantiated in the Bell II report.
The regulator said four significant breaches had been detailed in the report by Adam Bell SC, including one that resulted in a cash fraud against The Star, a failure to run source of wealth checks on hundreds of members flagged as high risk, and fraudulent guest welfare entries that put already vulnerable customers at higher risk of harm.
The NICC is also seeking further information in relation to Star’s management, operation and culture, the adequacy and implementation of its remediation plan, and the company’s overall suitability to hold a casino licence.
The Star has 14 days to respond to the notice, following which the NICC will consider what steps it will take, including whether disciplinary action is appropriate.
Disciplinary options available to the NICC include cancellation of the licence, and a pecuniary penalty of up to $100m. The commission could also decide to amend the terms or conditions of Star’s licence, or require an enforceable undertaking on its future actions.
The Star said it expected to respond to the notice by September 27, and was considering the matters raised by the regulator as well as the findings of Bell II.
There is growing concern The Star, which is facing a $300m cash crunch, does not have the financial firepower necessary to reform itself.
The Star said it was continuing to work with various stakeholders and advisers in respect of its financial position. These discussions were ongoing and involved, among others, state governments, regulators and the company’s lenders.
Star delayed its annual results announcement on August 30, the same day the NICC released the findings of the second inquiry by Adam Bell SC that found The Star was continuing to fail standards required of a casino operator.
NICC chief commissioner Philip Crawford said the Bell II report revealed a company that had not moved quickly enough to address the governance and cultural concerns raised in the first Bell report in 2022.
The NICC said the third volume of Mr Bell’s report, which includes an evaluation of Star’s finances, was confidential and subject to a nonpublication order.