Queensland doubles down on The Star with $100m fine and on-hold licence suspension

Queensland doubles down on The Star with $100m fine and on-hold licence suspension

The Star's Treasury Hotel in Brisbane, with construction for the Queen's Wharf project in the background. 

The Star Entertainment Group (ASX: SGR) has been hit with a $100 million fine and a 90-day suspension of its casino licence in Queensland as the state’s Attorney-General took a hard line against the casino group in the wake of the Gotterson review of its Brisbane and Gold Coast operations.

However, the suspension has been placed on hold until 1 December next year to allow the company to get its ‘house in order’ after Nicholas Weeks – the independent expert overseeing The Star’s NSW remediation program - was appointed special manager of its Queensland operations.

The Queensland penalties imposed on The Star mirror those handed down by the NSW Independent Casino Commission in October, which also included a separate $100 million fine.

In handing down the penalties today, Queensland Attorney-General Shannon Fentiman revealed the Destination Brisbane consortium developing the $3.6 billion Queen’s Wharf casino complex has avoided disciplinary action because it is not yet operational, but she makes it clear the casino licence for the new property also hangs in the balance.

“The future of Queen’s Wharf and the casino licence is in The Star’s hands,” says Fentiman.

Fentiman says Weeks, a former CEO and head of integrity at the National Rugby League, is a ‘very experienced individual’.

“Given that The Star is one company, it makes sense for the special manager to be working across NSW and Queensland,” she says.

Terri Hamilton, who has experience in overseeing counter-terrorism and anti-money laundering systems at Sunsuper, has been appointed to assist Weeks in Queensland.

“Between the two of them, they will have oversight into all operations at The Star,” says Fentiman.

“They will begin by doing a root cause analysis about how these unlawful and criminal acts can happen in casinos. It makes sense to have that collaboration and co-operation between regulators across different states because it means that the casino can’t play one regulator across the other.”

In another blistering attack on The Star, Fentiman repeated her previous criticism of the company’s ‘one-eyed focus on profits’ at the expense of its corporate social responsibility.

“As Mr Gotterson found, The Star lied,” she says. “The Office of Liquor and Gaming here in Queensland was asking the appropriate questions, was trying to get answers from The Star and they were not truthful with the regulator and they were not truthful with their own bank.”

Fentiman notes that the Gotterson review found The Star ‘did not resource their ant-money laundering policies, they did not take it seriously, they allowed patrons excluded from NSW into Queensland casinos and they lied to the regulator and their bank about the nature of China Union Pay transactions’.

“Clearly, they are the actions of a company that is not suitable to hold a licence. They will need to put in place remediation works within their company to ensure this never happens again, that there are strong checks and balances that they are considered suitable to hold a casino licence.

"These disciplinary actions of course aim to strike a balance between ensuring that thousands of Queenslanders can remain employed, but also sending that very strong message that what happened here in Star casinos is completely unacceptable."

With the Queen’s Wharf development set to open in the second half of next year, the Attorney-General has put The Star on notice that it also faces ‘significant conditions’ on its licence should the company fail to show its remediation program has progressed.

“Those conversations will happen next year,” she says.

The Star is also facing a potential third strike in the wake of both the Gotterson review and the Bell review in NSW earlier this year, as the financial crimes watchdog AUSTRAC pursues a Federal Court action against the company alleging ‘serious and systemic’ failures that exposed the group to criminal exploitation.

The Star requested a trading halt for its shares this morning ahead of the announcement. The company’s shares last traded at $2.54.

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