The Star Entertainment Group’s (ASX: SGR) self-appointed independent monitor has pinned the success of the casino operator’s bid to hold onto its casino licences in NSW and Queensland on new CEO Robbie Cooke.
In the first report to The Star by global law firm Allen & Overy, which was appointed by the company in August to monitor the design and implementation of its renewal program, the independent monitor describes the task ahead as ‘complex’ with the process expected to take at least two years to fully implement.
“The Star is planning on delivering a complex, highly integrated program of work, involving cross-cutting organisational issues with significant technology, training and communication components,” says the report, which was released by The Star on the ASX today.
“While we haven’t yet had an opportunity to interview the incoming CEO, we have, in the course of preparing this report, engaged with a number of The Star’s senior leaders including the interim chair of the board (Ben Heap).
“On the basis of these conversations and reflecting on the scale of The Star’s investment and the degree of senior focus being shown, we believe The Star recognises the degree of challenge it faces in remediating the root causes and restoring trust and has shown an intention to do so.
“We also recognise Robbie Cooke’s leadership will be pivotal to the program’s success.”
Cooke has taken over from Heap as program sponsor, making him responsible for delivering the outcomes from the renewal program that is aimed at rooting out the culture of placing profit above accountability identified in separate inquiries by casino regulators in NSW and Queensland.
Cooke stepped into the CEO’s position a week ago, replacing Heap who assumed an executive chairman’s role following the boardroom exodus at The Star in the wake of the reviews into the company’s suitability to hold a casino licence.
The Bell inquiry in NSW and the Gotterson in Queensland both led to show-cause notices being handed to The Star following damning findings that revealed a culture within the organisation’s senior management that turned a blind eye to potential risks of organised crime infiltration and money laundering activity at the company’s properties in Sydney, Brisbane and the Gold Coast.
The NSW Independent Casino Commission has also appointed expert advisor Nicholas Weeks as manager of The Star’s casino licence in Sydney as the company prepares to implement its renewal program. It has also fined the company $100 million following the findings in the Bell report.
The Allen & Overy report has found that, based on its investigations, The Star ‘appears to have appropriate governance and oversight arrangements to support program execution’.
The independent monitor will remain in place to oversee the program’s implementation, which is expected to be completed by September 2024. Assurance work is expected to continue into 2025 to ensure the sustainability of the changes being delivered.
Allen & Overy says it will seek ongoing input from Weeks and any potential appointee proposed by the Queensland authorities for The Star’s Brisbane and Gold Coast properties as it monitors progress of the renewal program.
The independent monitor’s ongoing role will include determining whether appropriate accountability statements and performance measures for program delivery are implemented and how Cooke as program sponsor is held to account.
The Queensland Office of Liquor and Gaming Regulation is still awaiting a response from The Star to its show cause notice issued 6 October. The Star has until this Thursday 27 October to provide a response to the OLGR’s threat to revoke its Queensland casino licence.
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