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The Star Entertainment Group’s casino in Sydney will be fined $100 million and its licence to operate suspended by the NSW casino watchdog after a damning report into its operations.
NSW Independent Casino Commission chief commissioner Philip Crawford announced the penalty—the maximum possible under laws introduced by the NSW government in August—on Monday and said Star’s Pyrmont casino was unsuitable to hold a licence.
“The NICC has resolved that it is no longer in the public interest that the Star should remain in control of that licence, and that the Star is not currently suitable to be the holder of the licence,” he said.
“We found [The Star] very adversarial during the whole of the inquiry [and] their mindset wasn’t anywhere near co-operative in terms of getting the job done.”
Crawford said the casino would be able to remain open for at least 90 days in order to protect The Star’s 10,000 staff, with a potential for the time frame to be extended.
Gambling will continue at Star’s sprawling flagship complex overlooking Darling Harbour, but under the supervision of a special manager—Wexted Advisor’s Nicholas Weeks, who was appointed by Crawford late last week.
Weeks formerly worked as the executive manager of rival Crown Resorts’ transformation and regulatory response.
The casino features two gaming floors, one bar, three restaurants, 350 hotel rooms and 130 serviced and privately owned apartments. It also includes the 2000-seat Sydney Lyric theatre and 3000-seat Event Centre.
The decision to fine and suspend the casino follows a four-month inquiry led by Adam Bell, SC—who was a counsel assisting the earlier Bergin inquiry into Crown—which flagged serious systemic failures of corporate governance, risk and culture.
The September 13 report, which came in at 946 pages, found Star unfit to run its Sydney casino following allegations of money laundering, organised crime links and fraud.
The report came off the back of a public inquiry sparked by an investigation by The Sydney Morning Herald, The Age and 60 Minutes late last year.
One of the key contributing reasons was the casino’s China Union Pay (CUP) card scheme that let high-roller patrons staying at the Star Grand Hotel use their CUP debit cards to fund gambling in breach of Chinese laws.
It also allowed Macau-based junket operator SunCity to do business at the casino despite allegations of criminality between 2014 and 2021.
Sydney-based The Star Entertainment Group, which runs casinos in Sydney, Brisbane and the Gold Coast, said it had taken “significant and urgent remedial steps” and would do “whatever necessary to restore the casino to suitability”.
Thirty recommendations were made in the report to fix the issues identified. The Star said it had developed 48 specific initiatives and a comprehensive 130 milestones plan that would be met over the next two years.
Star’s new chief executive, Robbie Cooke, who has previously headed up Tyro Payments and Tatts Group, said the review had called out the practice of putting profit above compliance, and it had hurt shareholders.
“We’re definitely facing a few issues and there’s no sidestepping those,” Cooke said.
“The issues are confronting and there’s no denying the business had lost its way in a lot of ways.”
The Star’s renewal plan, scheduled to be completed by the end of 2024, will be run by an executive sponsor and tracked by international law firm Allen & Overy, which will act as the group’s independent monitor.
The casino operator is also planning to hire another 25 external financial crime specialists, lifting the total number to 56.
