)
The Star Entertainment Group’s (ASX: SGR) efforts to prove itself suitable to hold a casino licence in NSW are set to go under the microscope in a second inquiry launched today by the NSW Independent Casino Commission (NICC).
The casino watchdog says the inquiry comes on the heels of an extension for the second time of expert advisor Nicholas Weeks’ tenure as manager of The Star’s casino licence following the group’s licence suspension in October 2022.
The NICC says when the manager’s tenure was extended again in December last year, it was ‘not satisfied’ that The Star was progressing its remediation ‘in a timely fashion’.
Adam Bell SC, who undertook the original 2022 inquiry into The Star, is back in the chair for the second review which is scheduled to be wrapped up before the independent manager’s term ends in June.
NICC chief commissioner Philip Crawford says the Bell report in 2022 had triggered the need for ‘deep structural change’ at The Star to address the company’s failings regarding its oversight of anti-money laundering responsibilities and infiltration by organised crime.
“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,” says Crawford.
“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.
“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.”
The second Bell inquiry officially begins today and is expected to run for about 15 weeks, with the final report due on 31 May 2024.
The NICC says hearings will be held in camera and the report will be released publicly ‘in due course’.
“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,” says Crawford.
“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.”
Shares in The Star were placed in a trading halt pending the company’s response to today’s surprise announcement.
The NICC originally appointed Weeks as special manager of The Star for 90 days on 22 October 2022 but later extended the appointment for 12 months to 19 January this year.
Ahead of that deadline, in November last year, the NICC extended the special manager’s tenure until 30 June 2024, with The Star noting that the NICC ‘intends for this to be the final extension of the manager’s term’.
Under the leadership of Robbie Cooke, who was appointed CEO after a rout of The Star’s board in the wake of the Bell inquiry in 2022, The Star has firmed up a remediation plan to address the historical issues that have plagued the culture of the company’s casino operations in NSW and Queensland.
At the company’s annual general meeting in November, Cooke said The Star had improved its risk management, safer gambling and anti-money laundering capabilities while embedding ‘greater accountability and more robust governance’ into its procedures.
He also told shareholders that the company had improved its financial crime management and ‘overall approach to harm minimisation’.
The turmoil that has engulfed The Star since the original Bell inquiry continues to impact the casino group’s bottom line with writedowns in the value of its three casinos and a massive bill for legal and regulatory costs leading to a net loss of $2.44 billion in FY23.
Since its full-year earnings announcement in August, The Star’s market value has almost halved with the company’s shares last trading at 56c each.
Get our daily business news
Sign up to our free email news updates.
)
)
)
)
)
