Second Damning Probe Renders Star Unfit for Casino Operations
Significant delays in the release of the annual financial results for Star Entertainment, a troubled casino operator, were caused by its inability to regain control of its profitable Sydney casino.
Following the public disclosure of a scathing investigation into various operational failures within the billion-dollar gambling company, trading of the company’s shares was halted on Aug. 30.
The New South Wales (NSW) regulator is still deliberating the fate of The Star’s suspended license for its Sydney casino after a second investigation found the company to be lacking in meeting necessary managerial standards.
While The Star also manages casinos in Brisbane and the Gold Coast, the Queensland government postponed potential suspensions of its casino licenses until after completing a review following the NSW inquiry.
Despite being allowed to continue operating with a manager appointed by regulators, The Star’s Sydney license remains suspended due to revelations of failures in anti-money laundering and counter-terrorism measures.
The latest inquiry, led by Adam Bell, highlighted multiple compliance breaches, including a $3.2 million fraud that allowed clients to claim unearned funds due to a machine error, as well as violations of gaming time limits aimed at protecting vulnerable players.
Internal culture issues were also exposed, with systemic problems uncovered such as falsified records by staff to suggest intervention during extended gambling sessions in which no actual intervention occurred.
The future of the suspended operator is under review by the NSW Independent Casino Commission following the release of the second report’s findings.
Due to the need to finalize details for the 2024 financial year results and respond to recent financial reports, The Star postponed the delivery of its financial results and disclosed plans to address its declining stock price.
The company’s share price plummeted from over $5 to $0.45, prompting efforts to improve revenue by selling assets like the Treasury Casino building in Brisbane.
Criticism from the NSW regulator’s chief commissioner highlighted prior governance and cultural issues that were not promptly addressed by The Star, leading to the recent appointment of a new CEO, Steve McCann.
