NSW Inquiry: Star Could Not Find Credible Evidence

Star Entertainment Group was the latest to feature in the inquiry initiated by the government in New South Wales (NSW) into the dealings of casino operator Crown Resorts with the junket firm Suncity.

The ASX-listed group informed regulators that they switched Suncity to another part of the casino and tasked its internal anti-money laundering and compliance team to investigate further the matter, but as not enough evidence to prove alleged connections to organized crime was discovered, the casino operator decided to continue its partnership with the junket company.

Junket Casino Operations Review

The Independent Liquor and Gaming Authority (ILGA) in NSW is conducting this inquiry to review Crown’s probity to hold a casino license for its new Barangaroo casino near Sydney. The AUD$2.4 billion projects is nearing completion, but publications in several newspapers that revealed Crown Resorts had partnered with junket operators linked to powerful crime syndicates threaten to spoil the party.

Junkets are companies that help wealthy Chinese gamblers to avoid the controls imposed by China government related to moving large amounts of money out of the country, by organizing travel to international casinos and extending credit to the players which they recoup once the gamblers are back home.

Suncity is a major player in the junket space as the hospitality company operates properties in Macau and most of the world’s largest casino operators rely on it to bring them high-stake players. A state-backed report issued recently pointed the finger at the travel and hospitality operator, claiming it had incurred losses to the extent of billions from proxy operations.

Suncity’s owner, Alvin Chau, was barred from entering Australia by the Department of Home Affairs last year, an act which prompted Star to shut down its junket partner’s private gaming room at Star Sydney, the inquiry on Monday revealed.

Crown Resorts informed the gaming regulatory officials that its casinos in Perth and Melbourne continued to work with Suncity, even after being warned in due diligence reports 6 years ago that Mr Chau was considered by the US government to be involved with organized crime and to be a former member of the ’14K Triad’ in Macau.

An incident from 2018 in which Crown banned Suncity from operating its own cash exchange desk was brought to the ILGA, in which Crown found $5.6 million in cash stored at the junket’s private room at the Melbourne casino, a finding that had all the marks of money laundering on it. The rumour was denied by the Star chief casino officer, Greg Hawkins, who claimed that Suncity’s players had to buy playing chips from the cashier cage all the times.

Mr Hawkins also noted that Star would welcome any participation of the regulator in approving junket partners, much like in Queensland, as it would be given access to more detailed information from law enforcement agencies.

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