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The Star has ‘much at stake’, says regulator, amid looming second inquiry and plummeting shares
The Star Casino’s licence may be at further risk following the announcement of a second inquiry into its operations in Sydney, which comes amid concerns that The Star is not progressing its remediation quickly enough.
Lauren Croft
Following an independent inquiry in 2022 – which led to an external manager being appointed to run the casino and its licence being suspended in October that year – the NSW Independent Casino Commission (NICC) has announced a second inquiry to investigate The Star Casino’s suitability to continue operating.
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In December last year, following the release of the independent inquiry report that revealed extensive failings around anti-money laundering and counterterrorism, the casino was given six months to reform its business and win back its licence – or risk being shut down.
That report, in addition to an Australian Securities and Investments Commission (ASIC) investigation for alleged breaches of the Corporations Act, came with a number of high-level executive resignations over the course of 2022, including its former chief financial officer chief casino officer (NSW) and chief legal and risk officer and company secretary, as well as former CEO and managing director Matt Bekier.
Adam Bell SC, who delivered the first report in 2022, has now been appointed to conduct the second inquiry before the independent manager’s term ends in June this year.
Chief NICC commissioner Philip Crawford said Mr Bell’s 2022 report suggested deep structural changes that would address the casino’s failings and prevent further misconduct.
“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 licence,” he said.
However, the independent manager of the casino was extended for the second time in December 2023, leading to concerns from the NICC that The Star was not progressing its remediation in a timely fashion.
“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,” Mr Crawford said.
“Bell Two will bring us back to the Bell report and The Star’s efforts to regain its casino licence in the shadow of that report.”
In a statement to the ASX, The Star confirmed that the purpose of the inquiry was “to assist the NICC in forming a view as to what, if any, action the NICC should take in respect of The Star Sydney Pty Ltd (The Star Sydney) prior to the end of the manager’s appointment on 30 June 2024”.
Bell Two will run for approximately 15 weeks from 19 February, with the final report due on 31 May 2024. The report will then be released to the public.
“There is much at stake for The Star, so the NICC is giving the casino every chance it can to demonstrate whether it has the capacity and competence to achieve suitability,” Mr Crawford added.
“This includes meeting its financial obligations under the casino licence and funding its remediation program sufficiently. The inquiry will provide the NICC with the information needed to make an important decision for The Star, its employees, its stakeholders and the wider community.”
In another announcement to the ASX today (20 February), The Star also advised shareholders that it would be delaying its H1 FY24 results. The Star shares have dropped to a new low of $0.44 (as of 20 February), which is a 68 per cent drop since February last year.
