"Exceptionally disappointing": The Star CEO, CFO call it quits amidst second NSW inquiry

"Exceptionally disappointing": The Star CEO, CFO call it quits amidst second NSW inquiry

The Star Entertainment Group's (ASX: SGR) outgoing CEO Robbie Cooke.

Update (25 March 2024): The NSW inquiry into The Star's casino licence suitability was previously expected to be undertaken in private, but the counsel leading the inquiry has concluded it is in the public interest that it be held primarily in public view (more below).

As The Star Entertainment Group (ASX: SGR) faces another NSW Independent Casino Commission (NICC) inquiry to test if it can be deemed suitable to hold a casino licence, the gambling and resorts giant has today announced the departure of both its CEO Robbie Cooke and CFO Christina Katsibouba.

The announcement of Cooke's resignation was revealed after the market close today, following a decision from both the CEO and the board that his leadership would not be conducive to a positive casino licence suitability determination by he regulator.

"Whilst I find the position exceptionally disappointing, I have reached the conclusion that my continuation in the group CEO role is not going to be conducive to the NICC determining to find The Star capable of becoming suitable to hold a casino licence in NSW," he said.

"In these circumstances a change in leadership provides the best opportunity for the business to navigate the regulatory pressure it is facing.

"I take comfort in what we have achieved as a team over the last 16 months, and I’m certain the company is now on the right path."

Cooke will remain at The Star as a consultant for six months, while current chairman David Foster will take on an executive chairman position during a search for a permanent CEO.

"Robbie has worked tirelessly since he joined in October 2022, focusing on stabilising the operations, resolving a number of existential threats to the business, addressing separate remediation demands from regulators, and rebuilding the management team and systems - including the addition of more senior risk, compliance and financial crime executives, and the commencement of our culture transformation," says Foster, who joined the group just two months after Cooke. 

"Robbie shared in a resolve to put safe, responsible and ethical gaming at the core of what we do."

As a seasoned executive who had previously led Wotif, Tatts Group and Tyro Payments (ASX: TYR), Cooke has had to navigate ongoing regulatory challenges at The Star, in addition to the complexities of the Queen's Wharf project in Brisbane which has already dramatically changed the city's central riverside skyline and is due for a phased opening from August this year. 

In the role he was vocal in his opposition to the casino tax hike put forward by the NSW government in December 2022, complaining that there had been 'no consultation' over the change that would add $100 million in ongoing costs to operations annually in the state.

In mid-2023 the government announced it would delay the tax, leading the company to conclude earlier this year that uncertainty around its introduction has been resolved.

In the December half The Star Sydney saw its revenue drop 16.9 per cent to $450 million, and even though this figure is more than the combined revenue of both the Brisbane and Gold Coast operations, earnings in Sydney were half that of the Queensland business.

Just last month the group started a cashless gaming trial at The Star Sydney, and this week the Queensland Parliament passed laws that would make carded play mandatory for certain games and activities in casinos, in addition to other measures aimed at minimising harm.

Katsibouba has been with The Star for nine years but stepped into the CFO role in May 2022 following the exit of her predecessor Harry Theodore, who had been grilled during the first Bell inquiry where he admitted it was common industry practice to accept payments from high rollers via China Union Pay (CUP) credit cards even though it was illegal for these to be used for gambling.

She has decided to leave the company to pursue other interests, and was hailed by The Star as having been "instrumental" in implementing capital structure initiatives during 2023.

"Christina stepped into the CFO role following the Bell inquiry in 2022 and after two challenging years has decided the time is right to move on," says Foster.

"She leaves with both the board’s and my personal thanks, for her tireless efforts as CFO, and as an executive with the group. We wish her well."

On 25 March she will be replaced by Neale O’Connell, who was global CFO of Corporate Travel Management (ASX: CTD) between 2019 and 2021, and had worked as group CFO at Tatts Group between 2012 and 2018, alongside Cooke as CEO of the racing and sports wagering business for most of that time.

"Neale is a highly capable and credentialed replacement. With both an industry and listed company track record, he will bring new perspectives and leadership to our executive team," says Foster.

"Star operates in a highly regulated environment and is going through significant internal change. Neale’s expertise from previous roles will be highly valued."

After this story was published it was revealed on Monday morning (25 March) that Adam Bell SC, who is leading the NICC inquiry, had formed the view that it is in the public interest for the inquiry to be mainly held in public.

It was previously anticipated that the inquiry, due to start on 15 April with an expected duration of around three weeks, would be held privately.

Bell also requested a two-month extension to the reporting date. The NICC has agreed to extend the inquiry to accommodate the public hearings, with the final report now due on 31 July 2024.

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