Star Entertainment Chairman John O’Neill is the highest profile Star executive to take the fall in the probe of compliance breaches at the Australian gaming operator.
O’Neill’s resignation followed by days that of longtime non-executive director Gerard Bradley, who announced he will soon follow other higher-ups who were forced to resign in the wake of the investigation.
Like Crown Resorts before it, Star apparently disregarded its anti-money laundering obligations in order to make millions from Chinese high rollers.
The departure of O’Neill and Bradley comes amid a New South Wales inquiry into the company’s suitability to operate Star Sydney, Australia’s second-largest casino. Financial watchdog the Australian Transactions Report and Analysis Centre (AUSTRAC) launched a probe in June 2021 into the casino.
O’Neill had only been chairman since April 1. Before joining Star he led the Australian Rugby Union and Football Federation Australia. O’Neill is scheduled to be the final witness to testify before the AUSTRAC committee on Monday. In a release, the company said a departure date would be announced shortly.
“Mr. O’Neill informed fellow directors late today of his decision,” the statement said. “Mr. O’Neill will transition his chair and executive responsibilities in an orderly manner.”
In his testimony before the committee, Bradley conceded Star’s board “must accept responsibility” for “significant cultural failures” at the company. He admitted that he bore some “personal responsibility” and should have asked more questions of VIP management. The director said Star is setting up a “process of accelerated board renewal” but added that it will be a gradual overhaul, reported the Australian Financial Review.
“I have responsibility to ensure business continuity, and we’re seeking to have a process by which new directors are selected and take time to go through the normal probity process,” Bradley said at a May 12 hearing before investigators. Bradley’s resignation announcement followed the exits of chief financial officer Harry Theodore, chief casino officer Greg Hawkins, and chief legal and risk officer Paula Martin. Executive director Sally Pitkin will also step down “by the end of the financial year” with other changes expected over time.
Former CEO Matt Bekier, who resigned two weeks after O’Neill took over as chairman, claimed board members were not to blame for misconduct uncovered at the casino because they weren’t privy to details of operations by Star’s VIP team.
Bradley has been on Star’s board for nine years, and has recently stepped down as chairman of the Queensland Treasury Corp.
According to media reports, Pitkin “choked back tears” during her testimony and said there had been indifference about money laundering at Star Sydney. “That indifference has come about because of a failure to understand the harm that occurs from money laundering,” she said.
Among the breaches disclosed at the resort were $676 million in withdrawals from China Union Pay debit cards to fund gambling; some of those transactions were reported as hotel and travel expenses. Star was also accused of setting up a secret gambling room for junket operator Suncity, now dissolved due to illegal gambling promotion in China, and also of hiding its illegal cash from NSW regulators.
According to the New Daily, one Chinese high-roller who bought $1.7 billion in chips at Star Entertainment casinos had three passports on file under two different names and should have been investigated as a “high-risk” patron.