The Star Entertainment Group is on choppy seas with the ongoing regulatory review and despite its best efforts, the inquiry says that Star’s Sydney casino is “not fit” to hold a license.
“Not Fit” for License, What Does It Mean
The New South Wales Independent Liquor & Gaming Authority (ILGA) requested an inquiry into The Star’s reportedly suspicious activities at gaming venues. Naomi Sharp SC, the counsel assisting, said on Tuesday that the review into The Star and its Sydney casino still has a way to go in order to understand “what has gone wrong within these organizations.”
The review process hasn’t concluded in its entirety yet, but Sharp added that “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.” While addressing Adam Bell SC, who is heading the inquiry, Sharp appealed for him to use the same approach used in the Bergin Inquiry of Crown Resorts where if “most norms” are not met, then the examined company’s “journey is at its end”.
Corporate Scurrying Not Enough
When regulatory pressure builds up and dubious practices are fast becoming common, these sorts of inquiries usually don’t end well for licensees. Crown’s “poor corporate governance” and “deficient risk-management structures” were the key issues the Bergin Inquiry identified, leaving the company’s operating license hanging by a thread. Crown was under review for suspected money laundering, fraud, and organized crime and a plethora of c-level changes were par for the course. In the end, Crown was found unsuitable to hold a license.
The Star was already ahead with C-level personnel leaving or moving. Mark Bekier resigned as then-CEO in March and three more executives jumped ship at the beginning of May. Yes, a new CEO was appointed in April as John O’Neil took over in April, only to step down in May.
Amidst top-level clean-ups, Star also cut all rebate programs to avoid complications during the review process. The “complications” were some suspicious switch-ups of local players that some critics might interpret as possible attempts to save on tax. Suspected AML-related issues were also a part of the problem.
Tumultuous Times During Review
Some “questionable” or unclear activities require further investigation. On May 5, former Star senior VP Simon Kim, ran away after the inquiry brought to light that he had stolen $9.7 million in 2020 – money that was supposed to be sent to Kuan Koi but was instead redirected to Kim’s personal account.
Another problem that popped up during the inquiry was dealing with the Chinese billionaire Huang Xiangmo, who is banned in Australia. The Star has processed around $1.3 billion of the billionaire’s money between 2010 and 2018, despite the heavy regulations. It’s alleged that the deposited ludicrous sums were used for briberies.
It would seem that there are many issues that need to be addressed as a result of the ongoing review and Sharp outlined 26 areas that need to be expediently worked on:
“There has not yet been the period of deep reflection which of course will be necessary in order to develop a concrete plan about what … can bring these corporations into a position of suitability,” Sharp said.
Although it might all seem doom and gloom for Star at the moment, it’s important to note that the company is still in a position to receive an eventual opportunity to remedy its shortcomings and alleged wrongdoings. That’s not to say that this kind of behavior is or should be normalized – that is, after all, the sole purpose for IGLA’s existence, and gaming companies in Australia – it seems – will be reminded of that.