Australia’s Star Entertainment Group continued working with Macau junket promotor Suncity Group in secret despite informing the market in 2019 that the two companies had agreed to part ways, it was alleged during public hearings on Wednesday.
In an explosive day of testimony as part of an inquiry into Star’s suitability to retain its casino license for The Star Sydney, Star’s Group Manager Due Diligence and Intelligence, Angus Buchanan, said the company had not stopped working with Suncity at all but instead moved the junket’s operations into an unbranded private room.
Suncity “was still operating at the Star, albeit not under the Suncity banner,” Buchanan said, noting that the only difference between its former home, Salon 95, and its new home, Salon 82, was that the latter did not have any Suncity-branded signage.
The public announcement that Star and Suncity were parting ways by mutual agreement followed a media investigation into the junket promotor’s operations at Crown Melbourne and ultimately led to inquiries in all three states where Crown operates. Crown was ultimately found unsuitable to hold a casino license in NSW and Victoria – although it is currently working through mediation – and since late 2020 has parted ways with all but one member of its Board of Directors.
Speaking to Inside Asian Gaming at the time of the media reports, a Suncity Group spokesman said the company’s Australian VIP rooms were being closed but claimed it was “a commercial decision due to lack of demand and high operation costs in Australia.”
Suncity Group CEO Alvin Chau was arrested and detained in Macau last November for alleged criminal association, illegal gambling and money laundering.
Star’s decision to continue working with Suncity came despite an internal report from Star’s risk management team in 2018 which stated, “Suncity is operating a business model under our noses which is problematic for Star Entertainment Group with regards to AML-CTF laws.”
Footage from Suncity’s salon at The Star Sydney recorded in April 2018 and played at the public inquiry on Wednesday showed large bundles of cash being exchanged at the cage, potentially contravening Star’s NSW casino license which stipulates that only Star can offer such cage services within its casino.
“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,” the internal report said.
Star said it had addressed the issue with Suncity management but their response was said to be “unhelpful and evasive.”
Despite this, Star continued its relationship with Suncity in secret the following year and did not change its AML risk rating.
Star’s response, Buchanan said, was “somewhat weak, and not proportionate to the risk.”
