Published on: October 17, 2024, 02:03h.
Last updated on: October 17, 2024, 02:04h.
Star Entertainment has once again been fined by the New South Wales Independent Casino Commission but has been allowed to continue operating its Sydney resort.
As Australia’s second-largest casino operator, Star has agreed to pay a A$15 million (US$10 million) penalty after the NSW Independent Casino Commission (NICC) determined that the company is still not compliant with regulatory obligations. Despite this, Star has been given permission to maintain the operation of slot machines, or pokies as they are known in Australia, and live dealer table games at The Star Sydney.
Back in 2022, an inquiry in NSW concluded that Star Entertainment was not suitable to hold a gaming license in the state. The investigation revealed significant evidence that The Star Sydney had inadequate measures to prevent money laundering at its casino and to keep criminal organizations off the premises.
Following the 2022 inquiry, Star was permitted to continue operating the Sydney casino but under the supervision of a manager appointed by the government. Star was instructed to implement various corrective actions to bring the casino into compliance with regulations and was penalized with A$100 million.
Two years later, a follow-up review conducted by the NICC determined that more efforts are necessary to demonstrate suitability and regain full control of the company’s gaming license.
Star Continues to be Noncompliant
Upon announcing the A$15 million penalty, NICC Chief Commissioner Philip Crawford highlighted that the second inquiry identified ongoing failures in compliance and that the operations at The Star Sydney still fall short of meeting suitability standards.
Crawford mentioned that the NICC-appointed manager, Nick Weeks, will continue overseeing The Star Sydney until at least March 2025 when another assessment of the casino’s operations will be conducted. Crawford explained that The Star is still facing numerous deficiencies in its governance, regulatory compliance, technology operations, and risk management.
In a casino environment, breaches of compliance can have significant repercussions for the community, and the Bell Report demonstrated how quickly inadequate controls can lead to criminal involvement and gambling-related harm,” Crawford stated. “The NICC acknowledges the challenges that The Star is confronting and will persist in closely monitoring The Star’s progress in proving its capability to regain its casino license.”
In addition to the fine, the NICC has mandated additional financial and operational reporting requirements to be fulfilled by March 2025.
Crawford also mentioned that The Star CEO Steve McCann, who took on the role in June after serving as the CEO of Star’s competitor Crown Resorts, has maintained an open communication channel with the casino regulator. Crawford noted that the NICC has established a more positive relationship with Star’s management since McCann’s appointment.
Star Facing Financial Challenges
Star Entertainment remains a target for potential takeovers, as the casino operator behind The Star Sydney, The Star Brisbane, and The Star Gold Coast continues to operate at a substantial loss.
Just last month, The Star reported its second consecutive multibillion-dollar annual loss. The company’s shares traded on the Australian Securities Exchange closed at A$0.29 on Thursday.
Despite rumors circulating that US-based company Hard Rock International was considering acquiring The Star Entertainment, they have denied any interest, as per reports from the Australian Financial Review.
Private equity firm Blackstone, which already owns Crown, is also reportedly contemplating making a bid for Star. Blackstone also owns several properties on the famed Las Vegas Strip, including the Bellagio, The Cosmopolitan, Aria, and Vdara.