Updated ,first published
Star Entertainment’s licence for its Sydney casino will stay suspended for a further nine months, after the NSW regulator said questions remained about the company’s progress in improving its governance, leadership and culture.
Star lost its licence to operate its Sydney casino in October 2022, after a NSW government inquiry found it was unfit to continue operating independently. The NSW casino regulator then appointed Nick Weeks as manager to provide external oversight of the casino, allowing it to keep trading.
On Friday the NSW government said that Weeks’ term would be extended until June next year, following a request from the NSW Independent Casino Commission (NICC).
NICC chief commissioner Philip Crawford said questions remained over the casino’s progress in improving its governance, leadership and culture.
“There is no doubt that The Star has come a long way in addressing the matters which led to the suspension of its casino licence in 2022,” Crawford said.
“However, recent allegations regarding governance, leadership and culture at the casino are serious and are being treated as such by both the manager and the NICC. It is disappointing that despite the progress made by the Sydney casino, the Group company continues to experience problems that affect each of its properties.”
The move comes after this masthead last month reported that a leaked recording of Star Entertainment Group’s most senior executives had captured top staff complaining of the risk and compliance measures forced onto the scandal-ridden firm by regulators as it attempts to retain its licence in NSW and Queensland.
Crawford said on Friday: “The NICC will be watching carefully to see how The Star and The Star Entertainment Group resolve these issues. Both companies need to demonstrate to the NICC that they have learnt from past mistakes and can resolve these cultural issues without the need for the NICC’s intervention.”
One big cloud hanging over The Star’s future is the outcome of civil proceedings in the Federal Court brought by AUSTRAC alleging serious and systemic non-compliance with Australia’s anti-money laundering laws, the NICC noted.
The claims include that The Star had poor governance of risk management, failed to conduct customer due diligence and did not appropriately monitor transactions to identify suspicious activity. The company could face significant financial penalties if the court delivers an adverse finding.
“These are all issues which need to be resolved before the NICC can lift The Star’s licence suspension,” Crawford said.
The development in NSW comes days after the Queensland government announced that it would defer an impending 90-day suspension of The Star’s licence to operate its Gold Coast casino. The suspension was set to take effect from September 30, but the six-month deferral gives the operator more time to demonstrate its remediation efforts.
The regulatory issues continue during a period of financial woe for Star Entertainment. It posted a $307 million loss in the most recent financial year as auditors reiterated their significant doubts about the group’s survival prospects.
“While we are no strangers to casino turnarounds, The Star is one of the most complex challenges we have encountered,” Star chairman Soo Kim told investors in the company’s annual report released at the end of August.
The 2022 inquiry into The Star that led to its initial suspension, led by Adam Bell, SC, found Star was unfit to hold its Sydney casino licence following a damning inquiry into its suitability.
It followed a 2021 investigation by The Sydney Morning Herald, The Age and 60 Minutes that accused Star of having enabled suspected money laundering and organised crime in its Australian casinos for years, even though its board was warned that its anti-money-laundering controls were failing.
Gambling revenue has fallen and regulatory costs have mounted following the run of scandals.
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Clancy Yeates is deputy business editor. He has covered banking and financial services, and was previously national business correspondent in the Canberra bureau.Connect via X or email.
Elias Visontay is a National Consumer Affairs Reporter at The Sydney Morning Herald and The Age.Connect via email.From our partners
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