Casino Within Casino – Not а Good Idea in NSW
Star Entertainment is under a regulatory review, and on the last hearing, assisting counsel Naomi Sharp SC made an accusation in the closing arguments about Star’s relationship with Suncity Holdings, the Chinese investment holding company and junket operator. The problem stems from Star allowing Suncity to install and operate its own cage within the Sydney Casino, which is in direct contrast to state law. According to New South Wales’ Unlawful Gambling Act, only the holder of the license may operate a cage, which in this case in Star.
As the IAG reported, there was footage of cash being exchanged at Suncity’s cage inside the Star casino, with the internal report saying that “Allowing the Suncity service desk to operate without controlling for the above risks could result in serious legal non-compliances and is outside the risk tolerance of Star Entertainment.” Star’s previous responses to these sorts of allegations have historically been “somewhat weak,” but that might have to change this time around, as the current allegations and accusations are made during an official hearing regarding an ongoing regulatory review, with Star’s license on the line.
Extensive Backlog of Allegations
Speaking of Star’s casino license, it’s already been proposed by Sharp that Star is “not fit” for a license in its Sydney casino. During the hearing, Sharp addressed Adam Bell SC – the lead counsel in the inquiry – urging him to copy the approach used during the Bergin inquiry of competitor Crown Resorts. Sharp cited that if “most norms” weren’t met and too many infringements were ascertained, then Star’s “journey is at its end.”
Star has been fighting tooth and nail to clean up its act, with Mark Bekier resigning as CEO in March, with John O’Neil taking over in April, only to quickly step down in May. Three more executives left Star in May as well, making for a very tumultuous top-level company scurrying. This might have actually paid off in dividends, as toxic corporate culture was actually one of the most critical components that the inquiry would call changes for. Furthermore, Star also cut all of its rebate programs, which according to critics were probably too dubious to withstand the scrutiny of a regulatory review.
However, a few AML accusations do not complete the list of accusations that Star faced. Legally questionable transactions, like the ones totaling $1.3 billion, coming from Chinese billionaire Xiangmo came to light during the review, as well accusations of multiple law breaches make the case against Star pretty tough to fight. To cap it all off, this new infringement also coincides with other alleged gambling law breaches, such as the China UnionPay (CUP)payments, which was an especially tough accusation. During one of the hearings, Sharp said that “every time the CUP card was swiped” in Star’s lobby, “there was a breach,” by making the money available before it was even passed through Star’s account.
Now this second alleged breach of casino and gambling law might make some think about a systemic pattern of unlawful conduct in the company, which could turn ugly quickly if everything is confirmed. However, since the inquiry is officially still ongoing, we will have to wait and see what the outcome is. Initially, it was supposed to conclude on June 30, but it appears a two-month extension has been approved by New South Wales Independent Liquor & Gaming Authority (NSW ILGA), to allow for more witnesses to be questioned and more statements to be accepted, exendin the probe’s end date to August 31.