The Star Entertainment Group (ASX: SGR) has pleaded with the NSW Independent Casino Commission (NICC) to keep its casino licence in Sydney, arguing it has already taken ‘significant and urgent’ steps to address the ‘shocking’ findings raised in the Bell report released two weeks ago.
Following an extensive probe earlier this year, the report found the company exposed itself to money laundering and organised crime activity from punters both domestically and from offshore.
A show cause notice was issued by the NICC two weeks ago for The Star to explain why its licence should not be revoked, prompting today's formal response from the company accepting the findings of its unsuitability to hold a casino licence.
“The Star Entertainment Group and The Star Sydney also acknowledge the gravity of the conduct which is raised in the Bell report,” executive chairman Ben Heap said.
Heap claimed The Star had taken ‘significant and urgent remedial steps, including increased risk, compliance, and security staff, approval of upgrades to surveillance technology as well as permanently exiting junkets and closing the Marquee nightclub’.
The closure of Marquee is among the peripheral changes being implemented by The Star Sydney by the property’s new boss Scott Wharton who has cited ‘incidents and issues’ that have surfaced at the nightclub at times.
The Star also has revealed a comprehensive remediation plan it believes will take until the end of 2024 to implement in order to enhance risk compliance and the culture of accountability within the group.
“We intend to do whatever is necessary, in consultation with NICC, to restore The Star Sydney to suitability,” Heap said.
The response comes two weeks after a searing attack on The Star by NICC chief commissioner Philip Crawford when he handed down the Bell report. The report found The Star had exposed its operations to serious risks of money laundering by allowing criminals to gamble in their casinos and allowing organised crime to infiltrate the property while paying ‘scant regard to proper harm minimisation criteria’.
Crawford, who described the findings as ‘quite frankly shocking’, also noted that The Star has been slow in making the necessary changes to its procedures despite mass resignations from the board and its senior management ranks.
In today’s response, The Star points out that it has a new team leading it on the path to suitability, one that ‘will be very different to those who led The Star in the past’.
Among the latest executives to go is acting CEO Geoff Hogg who resigned yesterday ahead of today’s show cause response and ahead of the report from a separate Queensland inquiry expected to be handed down by Robert Gotterson KC this Friday, 30 September. Hogg was formerly head of The Star’s Queensland operations for more than a decade.
Hogg joins former CEO Matt Bekier and former chairman John O’Neill in making their exit from the board this year. Ben Heap is currently acting as executive chairman until incoming CEO Robbie Cooke joins the board later this year.
In the wake of criticism from Crawford two weeks ago, Heap says ‘it is plain that we had not acted with the necessary urgency’.
“You have made this clear to us. We have a lot to do to restore a constructive and open working relationship with NICC.”
The Star says its plan is aimed at addressing recommendations from the Bell report and from the Gotterson report when it is handed down in Queensland, as well as the Australian Transaction Reports and Analysis Centre (AUSTRAC) which monitors money laundering activity in Australia.
Heap says the plan comes on top of actions already taken including the suspension of all rebate-play programs, the closure of its international offices and bank accounts, the cessation of international junkets and the acceptance of China Union Pay credit cards to fund gambling. The Bell inquiry found The Star had deliberately misled China Union Pay and the National Australia Bank (ASX: NAB) about the use of these credit cards by Chinese nationals as any funds forwarded were prohibited to be used for gambling.
“We are committed to working swiftly, constructively and transparently with NICC, our other regulators, and the independent monitor,” says Heap.
“This is important not only for the business but for our thousands of committed and hard-working employees. We owe it to them to do everything in our power to get this right.”
With the changes in train, The Star has asked the NICC to allow the company to operate in NSW under strict supervision and accountability to the milestones set out in the remediation plan.
Among the measures to be implemented by the Star are changes to its whistleblower policy to make it easier to expose inappropriate conduct by the company’s employees, including a new whistleblower hotline to be established by 30 November 2022.
The Star has also boosted resources in its financial crime, risk and compliance team with an extra 53 members, including 25 external financial crime specialists. It is also adding 15 extra facial recognition cameras, taking the total to 70, to monitor excluded punters from entering the casino.
The Star has also entered an information-sharing protocol with Crown to monitor gamblers who are subject to self-exclusions in their respective casinos.
“We are committed to do what it takes to deliver our remediation plan and restore The Star Sydney to suitability,” says Heap.
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