After a lengthy investigation, Australian officials have recommended that operator Star Entertainment Group be deemed unsuitable for casino licensure in New South Wales (NSW), with regards to shortcomings at its Star Sydney casino.
That said, the recently formed NSW Independent Casino Commission (NICC), which holds regulatory authority over Star Sydney, has yet to make an official decision on the matter.
The investigation into Star’s operations, known as the Bell Report, was conducted by Adam Bell SC, a former judge. The NICC received the report last week, and released its findings to the public September 13. It asserted that Star is “ presently unsuitable to be concerned in or associated with the management and operation of a casino in NSW,” but did not offer any recommendations or assessments as to what punishments should be administered.
Instead, it said that that “is a matter for determination by the (NICC).” The agency confirmed that it was currently mulling its options in terms of disciplinary action.
The report shed light on numerous failures on behalf of Star Sydney, including the use of China UnionPay bank cards to illegally fund gambling, illicit relationships with Asian junket operations such as Suncity Group and other shortcomings related to counter terrorism financing (CTF) and anti-money laundering (AML) regulations.
Philip Crawford, chief commissioner of the NICC and former head of the NSW Independent Liquor and Gaming Authority, told Inside Asian Gaming that the findings were “quite frankly, shocking.” He added that the proliferation of evidence against Star highlighted a pattern of “extensive compliance breakdown in key areas” of its operations.
“We are in the process of taking stock of the report’s content,” Crawford added. “There are a range of implications across 30 recommendations that need to be worked through. Once we have given The Star the opportunity to respond to the notice, we will be in a position to determine an appropriate disciplinary approach.”
Perhaps the chief concern for Crawford and others was related to the controversy surrounding China UnionPay—according to the report, Star allowed 1,307 patrons, most of whom were Chinese, to transfer a total of $626 million across 8,912 transactions from July 2013 through March 2022. This practice is illegal in both countries, especially China, which has extremely stringent currency transfer laws.
Additionally, in order to circumvent the issue of funds taking up to two business days to reach Star’s accounts, the operator also devised an unapproved check cashing facility. This is also in violation of Australia’s Casino Control Act, as it is illegal for operators to issue credit.
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Star’s relationship with Asian junket operators, such as the much-maligned Suncity Group (now known as LET Group Holdings), was also highlighted in the report. Suncity was allowed to operate a private gaming room within Star Sydney until September 2019. The room was known as “Salon 95,” which featured its own casino cage, referred to as a “service desk.” Multiple CCTV recordings showed Suncity affiliates exchanging money for chips and vice versa.
Suncity’s founder, Alvin Chau, is currently on trial in Macau for charges related to illegal gambling operations and money laundering. The report asserted that “despite all that was known by [Star] about Suncity and Mr Chau, no further risk assessment of Suncity and Mr Chau was conducted.”
Bell was clear in his assessment that “There were reporting failures by the senior management team at Star Entertainment. [Matt] Bekier as Managing Director and Chief Executive Officer must bear significant overall responsibility for these failures. However, the Board must also bear some responsibility, because it was required to have systems and processes in place to ensure that it received the information it needed. This was also a failure of risk management and reflected a systemic cultural problem.”
In response to the report’s findings, Dominic Perrotett, the state’s premier, told News Corp Australia that “Star has been absolutely horrendous; they’ve got 14 days to respond to that report and if they don’t comply, they’re likely to close.”
A Star spokesperson told NCA that the company “acknowledges the comments of the NICC Chief Commissioner and by the NSW Premier this morning, following the release of the findings from the Bell Review,” and added that it is “preparing a response to the show cause notice issued to The Star by the NICC and are committed to working with our regulators in an open and cooperative manner.”
The company indicated that it had anticipated such results at the outset of the investigation, and has since offered eight recommendations to help align itself better with state regulations.
However, those suggestions seem to have fallen on deaf ears—”“Mr Bell did not agree with any of those eight submissions and found that Star remains unsuitable, ” Crawford said.
