Star Shocked by Second Inquiry into Star Sydney

NSW regulators have expressed doubt that Star Sydney (l.) is progressing adequately in its ongoing remediation efforts—as a result, the property will be subject to a second regulatory inquiry, with its future potentially at stake.

Star Shocked by Second Inquiry into Star Sydney

In a surprise announcement February 19, the NSW Independent Casino Commission (NICC) said that Star Entertainment’s flagship property, Star Sydney, will be the subject of another regulatory inquiry, this time amid concerns that the casino has not been sufficiently progressing in its remediation efforts.

Star was first found to be unsuitable for licensure back in 2022 for a host of shortcomings, including the use of China UnionPay bank cards to fund gambling and subsequent attempts to cover up those charges, illicit relationships with junket operators such as the now-defunct Suncity Group and other violations.

This second inquiry, which is to commence immediately and run through May 31, will also be led by Adam Bell SC—this latest inquiry has already been dubbed “Bell Two.” The company was reportedly not expecting the announcement, and was caught off-guard.

Notably, the 15-week term falls within the extended term of the special manager Nicholas Weeks, who was appointed by the NICC to oversee the property’s operations and remediation plan after the first inquiry. Weeks’ tenure was originally slated to end in December, but was extended to June 30 back in November.

In a statement, NICC Chief Commissioner Philip Crawford asserted that the bar for suitability was set very high after the first inquiry, insinuating the Star has not met those goals.

“There was a substantial shift required and The Star has had 18 months to demonstrate that it has the capability and resources to regain its casino license,” Crawford said.

Instead, Crawford said that the NICC is not convinced that the progress made so far is actually attributable to Star.

“The NICC has had concerns about the extent that remediation is attributable to the manager’s oversight and direction versus what is being driven by The Star’s reform agenda,” he said. “Bell Two will bring us back to the Bell Report and The Star’s efforts to regain its casino license in the shadow of that report.”

Immediately following the announcement, Star halted trading and later said that the company’s financial results for the first half of fiscal year 2024, which were set to be released February 23, will be delayed until further notice.

On February 20, Star filed a response to the NICC saying that it would cooperate with the investigation in an “open, transparent and facilitative manner,” and vowed to “demonstrate it is capable of returning to suitability with particular reference to the actions that have been put in place since the Bell report was issued.”

That said, the company also defended its plan of action as being “developed with oversight and input” from Weeks, and noted that it was “approved by the Queensland Attorney General.”

Speaking of Queensland, this latest action could also potentially draw suspicion in that state, given that Star is slated to open its multibillion-dollar Queen’s Wharf Brisbane development there this summer. No comment has been made on that front as of yet.

“The Star appreciates the opportunity to demonstrate it has the ability to regain suitability and will continue to do all in its power to work cooperatively with all its regulators including the NICC and its appointed manager,” the company said. “The Star remains committed to and focussed on executing its Remediation Plan and earning back the trust of the community.”

With regard to Star Sydney, Bell Two also comes just days after the operator signed a binding agreement with the state government to staff a minimum number of jobs through June of 2030 at the property, as part of conditions related to the deferral of increased casino tax rates that were negotiated over the summer.

Also included in the agreement is a mandate to trial and eventually implement cashless play at its gaming machines, as part of sweeping responsible gambling and harm minimization efforts.

“The Star appreciates the constructive engagement with the current NSW Government that has led to finalization of an agreement that provides employment certainty for our dedicated and hard- working team members in Sydney,” the company’s CEO and Managing Director Robbie Cooke said at the time.