By now, it’s safe to say that Australian operator Star Entertainment is not having a very pleasant end to 2022—the beleaguered company is busy putting out fires on several fronts around the country and is struggling to prove that it is suitable to hold its suspended licenses.
In New South Wales (NSW), the NSW Independent Casino Commission (NICC), the state’s casino regulator, notified Star that it is not endorsing or recognizing the third-party monitor that was self-appointed by the company to oversee remediation efforts.
Back in August, Star enlisted the services of local firm Allen & Overy Consulting (AOC) to help navigate its path to suitability. AOC then released a statement last month saying that it had endorsed Star’s remediation plan.
However, the NICC appointed its own special manager to oversee the operations of Star Sydney, that being Nicholas Weeks of Wexted Advisors. Weeks’ first task is to oversee Star Sydney’s operations for 90 days to ascertain whether or not it is possible for the casino to achieve suitability.
According to recent filings to the Australian Securities Exchange (ASX), Star acknowledged that “Based on information received from the Manager of The Star Sydney Casino, The Star understands that the NSW Independent Casino Commission does not endorse the appointment of an independent monitor at this time and as such A&O’s appointment is not made nor endorsed by the NICC.”
The company also pointed out that contrary to AOC’s prior endorsement, it “does not anticipate that the NICC will consider endorsing or approving any remediation program for some time.”
In Queensland, Star announced November 29 that it had responded to the show cause notices that were issued by the Office of Liquor and Gaming Regulation (OLGR) earlier this month.
The state regulator is currently investigating the company’s Treasury Brisbane and Star Gold Coast properties for many of the same failures that other states have already unearthed.
According to the OLGR, potential penalties range from license suspension to fines up to US$66 million. The agency could also appoint a special manager, much like the NICC did in NSW.
As if all of that wasn’t enough, the company was also recently issued a statement of claim from AUSTRAC, Australia’s financial crime regulator, which notified Star that it was “commencing civil penalty proceedings in relation to alleged contraventions of obligations under the Anti-Money Laundering and Counter-Terrorism Financing Act.”
In a statement, AUSTRAC said that “The civil penalty proceedings come after a proactive, industry-wide AUSTRAC compliance campaign that began in September 2019 and led to an enforcement investigation into The Star Pty Limited being opened in June 2021. In January 2022 the investigation was expanded to include The Star Entertainment Qld Limited and other Star entities.”
Star did note, however, that the recent statement of claim “does not detail the quantum of the penalty to be sought by AUSTRAC.”
The watchdog agency has alleged the company and its affiliates:
- Did not properly identify or acknowledge money laundering and terrorism financing risks ;
- Failed to incorporate proper controls and risk-based systems;
- Did not have proper transaction monitoring procedures in place;
- Failed to establish a management structure or framework to fight these risks; and
- Failed to perform proper due diligence, especially for high-risk patrons.
AUSTRAC asserts that the company allowed patrons to “move money through payment channels that were non-transparent and involved high ML/TF risks,” and therefore it could not “understand the sources of money moving through these channels or whether there was a risk that the source of funds was illicit.”
In Star’s ASX filings, Managing Director and CEO Robbie Cooke said that the company’s goal “is to earn back the trust and confidence of AUSTRAC and all regulators. We will continue to work with AUSTRAC to build a better, stronger and more sustainable company.”
