Australia’s Star Entertainment Group entered a trading halt on Monday amid speculation that a regulatory report to be made public this week will find the company unsuitable to retain its casino license for The Star Sydney.
In an ASX filing, Star said it noted media reports around the “yet to be released report from the review of The Star Sydney undertaken by Mr Adam Bell SC in accordance with the Casino Control Act 1992,” adding, “The Star has not received a copy of the report, is unaware of its contents, but understands the report will be released soon.”
While Bell’s findings are expected to be made public no later than Wednesday, The Australian reported Monday that they contain a recommendation Star be found unfit to hold a NSW casino licence unless it overhauls its Board of Directors and undertakes compliance reform.
It is unlikely, however, that Star would lose its license immediately, with the newly formed NSW Independent Casino Commission (NICC) expected to follow a similar route to regulators in Victoria and Western Australia where Crown Resorts has been given two years to prove it has reformed under the supervision of an independent monitor.
The now displaced NSW Independent Liquor & Gaming Authority (ILGA), which was handed a copy of Bell’s report in August (since turned over to the NICC), has already appointed an independent monitor to oversee and report on The Star Sydney’s operations.
ILGA also oversaw Crown’s efforts to prove reform in NSW, having initially been found unsuitable to open the casino at Crown Sydney following release of the Bergin Report in early 2020. The casino eventually opened its doors on 8 August this year having been granted permission in June – almost three years after Crown Sydney’s non-gaming outlets welcomed their first customers in December 2019.
Counsel assisting the inquiry into The Star Sydney had called on Star to be found unsuitable, citing failures across multiple levels of the business during closing arguments.
“We submit that the evidence in the public hearing establishes that the Star is not suitable to hold the casino licence and that its close associate Star Entertainment is not suitable either,” said Naomi Sharp SC at the time.
“There has not yet been the period of deep reflection which of course will be necessary in order to develop a concrete plan about what … can bring these corporations into a position of suitability.”
While the company looks likely to be found unsuitable as requested, Star will no doubt argue that its reform agenda is already well underway with CEO Matt Bekier and Chairman John O’Neill having already stepped down.
Former Tatts Group executive Robert Cooke has since been named Managing Director and CEO of Star Entertainment Group and former banking executive Scott Wharton CEO of The Star Sydney.
The review into The Star Sydney was initially prompted by allegations aired by local Australian media outlets late last year, and found deficiencies around Star’s relationship with Asian junket promoters. These included liberties granted to then-leading junket Suncity Group in operating its own VIP room at The Star Sydney and the illegal use of China UnionPay cards by Star to disguise gambling transactions.
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