The hits keep on coming for Star Entertainment in Australia.
On December 9, the Queensland government levied heavy fines against operator Star Entertainment, to the tune of US$67.9 million (AU$100 million). In addition, a 90-day suspension of Star’s casino licenses in the state has been deferred to next December, meaning the government has essentially given the company a one-year window to make changes to avoid suspension.
The penalties came in response to a number of regulatory shortcomings highlighted in the recent Gotterson Review, which deemed Star to be unsuitable for casino licensure in the state.
Star submitted responses to the show-cause notices issued by the state government last month, and after review, officials said in a statement that there “have been major failings by the Star group and its entities.”
In addition to the fines, Nicholas Weeks of Wexted Advisors has been appointed as a special manager to oversee operations for Star’s two casinos in the state, those being Treasury Brisbane and Star Gold Coast. Weeks has his hands full, having already been placed in charge of the Star Sydney casino in October.
Shannon Fentiman, Queensland’s attorney-general and minister for justice, told ABC News Australia that the penalties represent “a very clear message that unlawful and criminal behavior will not be tolerated in Queensland casinos.”
“These disciplinary actions aim to strike a balance between ensuring that thousands of Queenslanders can remain employed, but also sending that very strong message that what happened here in Star casinos is completely unacceptable,” Fentiman added.
While Star’s licenses for its two operational casinos in the state may potentially be in jeopardy, regulators did not place any penalties on its multibillion-dollar Queen’s Wharf development, due to the fact that it is still under construction.
However, Fentiman told ABC News that if Star doesn’t achieve suitability by the time they plan to open, there “will be significant conditions placed on their license.”
In a statement, a Star spokesperson said, “We are committed to doing everything in our power to earn back the trust and confidence of the community. That includes all our regulators, our 8,000-plus team members and our almost 75,000 shareholders.”
And the bad news keeps coming for Star, as the Australian Securities and Investments Commission (ASIC) has announced that it is pursuing civil charges in Federal Court against 11 of the company’s board members, both past and present, over failures related to the country’s Corporations Act.
The company’s illicit relationships with junkets, such as the infamous Suncity Group (now LET Group Holdings) and its failures regarding anti-money laundering regulations are considered to be the biggest reasons for the claims.
In a release, ASIC Deputy Chair Sarah Court said that the agency is alleging that “Star’s board and executives failed to give sufficient focus to the risk of money laundering and criminal associations, which are inherent in the operation of a large casino with an international customer base.”
Among the executives facing penalties are current Chairman Ben Heap, former Chairman John O’Neill, former Managing Director and CEO Matthias Bekier, former Chief Financial Officer Harry Theodore, former Chief Casino Officer Greg Hawkins, former General Counsel Paula Martin, Gereard Bradley, Sally Pitkin, Kathleen Lacy, Zlatko Todorcevski and Richard Sheppard.
According to ASIC, the executives were complicit in the company’s involvement with high-risk individuals and didn’t properly investigate risks of money laundering and terrorism funding, even when they were presented with information indicating that such risks may need to be addressed.
Bekier, Martin and Hawkins were named specifically by ASIC for failures related to the company’s relationship with Suncity and its founder, Alvin Chau, who is currently on trial in Macau for charges related to illegal gambling, money laundering and more. The agency alleges that the trio continued to deal with Chau despite knowing these risks.
ASIC also singled out Theodore and Martin for knowingly providing misleading statements to National Australia Bank (NAB), which tried to disguise the fact that the company allowed patrons to use China UnionPay (CUP) bank cards at NAB ATMs to transfer gambling funds, which is illegal in both Australia and China.
The agency alleges that “over $900 million was obtained by Star customers using CUP cards in NAB ATMs from 2013 to 2019.”
“As I’ve said on many occasions, directors and officers are a critical part of the conduct of business in Australia,” ASIC Chair Joe Longo said in a release. “Their duty is to understand the operations of the company over which they preside, and the particular risks faced by the business. They are required to bring an inquiring mind to business operations. It is not ‘set and forget.”
