The Star hit with $100m fine, licence suspension as new CEO Cooke faces 'tough job' ahead

The Star hit with $100m fine, licence suspension as new CEO Cooke faces 'tough job' ahead

NICC chief commissioner Philip Crawford

The Star Entertainment Group’s (ASX: SGR) Sydney casino licence will be suspended at the end of this week and the company fined $100 million in the wake of the Bell inquiry, with the NSW Independent Casino Commission declaring that incoming CEO Robbie Cook has a ‘lot of work to do’ to get the casino operator back on track.

NICC chief commissioner Philip Crawford this morning also announced that expert advisor Nicholas Weeks will be appointed as manager of The Star’s casino licence once the suspension takes effect this Friday.

Crawford says despite a letter of contrition issued last month by The Star’s interim executive chairman Ben Heap admitting to the gravity of the group’s shortcomings, the outcome could have been different for the casino group if it weren't for Cooke's appointment to address leadership shortcomings. 

“The remediation plan contained in The Star submission did not make much sense without the leadership of a competent and experienced CEO,” says Crawford.

“We have met with Mr Cook and he presents to us as someone who is absolutely capable of providing the strong leadership required at The Star.”

Cooke, who formerly led lotteries giant Tatts Group and hotel booking platform Wotif.com, assumes the CEO’s role at The Star today, with Heap returning to his non-executive role at the group.

Crawford today paid tribute to Heap’s interim leadership, noting hat he has led a ‘huge change’ at The Star.

“He's leading the board in a way that is showing contrition and wants to get on working with us,” says Crawford.

“In the past they've been very adversarial. They haven't really treated the regulator with the level of respect that they should have. The mushroom treatment doesn't work anymore.”

The NICC’s enforcement action follows damning findings by the Bell inquiry, which revealed a culture of acquiescence and cover-up that ignored the casino group’s exposure to money laundering activities and infiltration by organised crime.

The NICC says it has opted for a casino licence suspension rather than a cancellation in light of the ‘thousands of Star employees who (otherwise) would lose their jobs overnight’.

“The appointment of a manager does not mean the NICC believes The Star is suitable to hold a casino licence,” says Crawford.

“The appointment of Mr Weeks will allow casino operations to continue, and his primary focus will be to ensure a robust root cause analysis and review of the casino’s culture is undertaken. We're not setting this managership up on the basis that it's likely to fail. We want it to succeed.”

Weeks has been appointed as external manager of the casino licence for 90 days, but Crawford says this period can be extended by regulation.

"I'm really not sure at this stage how long it will be; I think 90 days is a short period so it could be quite a bit longer, but there's a lot of work to be done," he says.

Weeks has been working with The Star, ‘looking under the bonnet’ on behalf of the NICC, for the past four months.

“He's very well placed to understand some of the problems,” says Crawford. “He's got good experience in this field. He's respected by us. He's respected by the current management of The Star, and we've got confidence that he'll identify the issues that need to be addressed. It’s really up to he and Robbie Cooke to work together.”

Cooke joins The Star’s board following a mass exodus of directors including former CEO Matt Bekier and chairman John O’Neill.

While the inquiry revealed that $900 million in funds from Chinese VIP gamblers were facilitated by The Star through China Union Pay credit and debit cards over nine years, with the origins of those funds unable to be verified, Crawford says the amount of money poured through the specially created Salon 95 VIP room at The Star Sydney could have been much higher.

“We're not trying to quantify that, but the behaviour was just appalling,” he says. “The social contract was breached very badly by the findings outlined in the Bell report.”

Crawford says he is confident Cooke will provide the leadership needed to implement the remediation plan at The Star and restore a culture of accountability within the group.

Despite the mass exodus of the company’s board following the Bell inquiry this year, Crawford sees the need for the culling to continue.

“I think probably more people will need to leave the company that are caught up in what I regard as old Star,” he says.” We want people that are happy to acknowledge the importance of working cooperatively with the regulator, not people who want to do things while no one's looking.”

The NICC’s announcement today comes on the heels of a tougher regulatory framework introduced last week for Queensland’s casinos.

In line with the NICC’s actions today, the Queensland legislation provides for a special manager to be appointed to monitor and direct casino operations. The government can now also issue a fine of up to $100 million as a disciplinary measure.

The reforms have been implemented ahead of the final outcome from the Queensland Government’s show cause notice issued to The Star on 6 October 2022. The Star has yet to file its response to the show cause notice that has left the company’s licence for its Brisbane and Gold Coast casinos in the balance.

Get our daily business news

Sign up to our free email news updates.

 
Whitefox Recruitment founder Luke Hemmings making strides as a careers leader
Partner Content
After relocating his Canberra-founded company Whitefox Recruitment to the Gold Coast la...
Whitefox Recruitment
Advertisement

Related Stories

‘One-eyed focus on profit’: The Star’s Queensland licence now also under threat

‘One-eyed focus on profit’: The Star’s Queensland licence now also under threat

The Star Entertainment Group (ASX: SGR) has been slapped with ...

‘We have changed’: The Star pleads with NICC to keep its casino licence

‘We have changed’: The Star pleads with NICC to keep its casino licence

The Star Entertainment Group (ASX: SGR) has pleaded with the NSW In...

Hogg quits as The Star’s acting CEO just days ahead of Queensland casino inquiry findings

Hogg quits as The Star’s acting CEO just days ahead of Queensland casino inquiry findings

The depletion of The Star Entertainment Group’s (ASX: SGR) ex...

The Star chairman concedes leadership has been "arrogant and closed off to criticism"

The Star chairman concedes leadership has been "arrogant and closed off to criticism"

Two days after a blistering NSW Independent Casino Commission (NICC...