Is Star Casino Still An Investment Option?

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Star Entertainment Group, which is one of the top casino operators in Australia, is now in a lot of trouble after reports surfaced that the gaming operator had committed serious violations in gaming regulations.

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A New South Wales (NSW) inquiry into the casino operator revealed that a senior executive at the company was warned about the money laundering activities undertaken by junket promoter Suncity in the Star Sydney casino, back in 2018. Despite the warning, the group had secretly allowed Suncity to operate a private gaming salon for over a year in its casino.

Suncity’s Criminal Ties Spurred NSW Inquiry

Suncity invited high-profile Chinese gamblers to Star and Crown Resorts. In 2019, popular news portals revealed that the junket group had ties with organised crime syndicates. The startling revelation by the media prompted the NSW inquiry into the Star’s blatant violation of Australia’s anti-money laundering laws.

While confessing to the inquiry, the Star’s group general counsel Andrew Power, mentioned being extremely concerned about the Suncity issue. Power sprang into action after watching a video of the Suncity junket staff handling hefty wads of cash in the private salon at Star Sydney in May 2018.

Perturbed by the footage, Power communicated what he had witnessed to the casino chief, Greg Hawkins. He ignored Power’s warnings despite being aware that people associated with Suncity were being investigated by the NSW police. The Suncity staff declined to cooperate with the Star’s investigation into its susceptible cash dealings.

In August 2019, Star announced its decision to close down the private salon run by Suncity, given the latter’s criminal ties. However, the NSW inquiry revealed that Star covertly allowed Suncity to operate through another room till late 2020.

As the fate of Star has yet to be known, punters need not worry when it comes to playing at casinos in the hopes of winning real money because there’s certainly an ocean of choice!

Too Many Loopholes To Make A Serious Investment

Naomi Sharp, SC, the counsel assisting the NSW inquiry, asked Power if he could have recommended the Star to evict Suncity from the salon. Sharp said that Power could have suggested closing the private room. However, he expressed his doubts about the appropriateness of the decision, and his place in suggesting such a measure. Rather than closing the salon, Power said that Star had continued its investigation into Suncity’s dubious dealings while collaborating with financial crime watchdog agency AUSTRAC and other law enforcement agencies.

NSW’s regulator, the Independent Liquor & Gaming Authority (ILGA) extended the inquiry into the Star’s alleged malfeasances by two more months. According to the ILGA, further investigation would be required to assess the Star’s viability to operate a casino. After the extension, the NSW inquiry would report its findings by August 31, 2022.

Woolworths’ Sarah Scopel also left her current position after she confessed to misleading the National Australia Bank’s (NBA) financial crimes team by assuring it that the gambling transactions by Chinese high-rollers were hotel charges. Scopel, who was Star’s group treasurer at that time, admitted to the NSW inquiry about abetting the cover-up as she was afraid of losing her position at the company.

Given the multiple violations and how serious they are, this may not be the best time to make a significant investment into Star Entertainment.

Star CEO Bekier Tenders Resignation

Recently, Star CEO, Matt Bekier tendered his resignation to the board following misconduct allegations during the first week of the NSW inquiry. Shortly after the review undertaken by Adam Bell, SC, Bekier resigned from his position as the CEO and managing director at Star on March 28. The CEO had mounted a stubborn and furious reaction to the KPMG report that established the Star’s failure to curb money laundering risks in its casinos.

The executive owned his responsibility as the CEO of Star and stepped down immediately from the board. Bekier had angrily dismissed the KPMG report about Star Sydney as it alleged that the casino covered up gambling transactions of about $900 million by Chinese gamblers as hotel expenses.

After resigning, Bekier informed the board of his accountability to ensure that the company’s policies and culture should be compliant with the established rules and regulations.

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