Posted on: February 19, 2024, 08:41h.
Last updated on: February 19, 2024, 11:49h.
Sydney’s Star Casino will face a second investigation into its business practices. That’s after the New South Wales gambling regulator expressed doubts about the success of its efforts to reform.
Operator Star Entertainment was found unsuitable to hold a Sydney casino license in 2022 after a public inquiry found that the company had allowed money laundering, criminal infiltration, and fraud to occur on the premises.
Star avoided license revocation and was instead given until January 2024 to clean up its act. This resulted in the casino replacing its board and most of its executive team. But on Monday, the NSW Independent Casino Commission (ICC) called for a fresh inquiry over concerns that the casino has not done enough to address its failings.
Star ‘Blindsided’
The announcement is believed to have completely “blindsided” Star executives just one day before they were due to deliver half-yearly results, according to The Australian Financial Review (AFR). Star Entertainment on Monday requested a temporary trading halt for its ordinary shares on the Australian Securities Exchange (ASX).
I’m just not sure the extent to which they’ve addressed the cultural reform that [the first inquiry] said … was serious and endemic and needed a lot of work,” ICC chief Philip Crawford told AFR. “We want to see the progress they’ve made around that particular space. That’s really important.”
Star’s operations were described as “a case study of unethical conduct and cultural failure” in the initial inquiry by litigator Adam Bell SC, who has been asked to conduct the new investigation.
Secret VIP Room
The inquiry found that Star Casino management allowed Chinese high rollers to use China UnionPay (CUP) credit cards to withdraw a total of $900 million for gambling. These transactions were disguised as “hotel expenses.”
Meanwhile, the casino enabled now-defunct Macau junket operator Suncity to secretly operate an unbranded VIP room, known as “Salon 95.” At the time, Suncity had been identified by Australian authorities as having links to organized crime.
Salon 95 continued to operate after then-Star CEO Matt Bekier told regulators his company had severed business links with the junket.
The new inquiry will run for about 15 weeks, with the final report due May 31, ABC reports.
Separately, Australia’s financial crime agency, AUSTRAC, is suing Star Entertainment. It alleges the company allowed more than 100 high-risk VIP customers to launder billions through its casinos for years.
Star has been accused of wooing suspected criminals, foreign agents, and fraudsters to gamble at its casinos from at least 2014 to 2021.
