The Star Entertainment Group Limited has implemented 22 of the 30 recommendations issued by the independent review group that found the company unsuitable to hold a casino license.
Last year the company was declared unsuitable to hold a casino license in the Australian states of Queensland and New South Wales. The company was also fined AU$100 million ($64.3 million) by both states after inquiries revealed its failure to comply with anti-money laundering obligations allowed organized crime to capitalize off its casinos.
The Star is also facing four class action lawsuits from investors and is being prosecuted by AUSTRAC, the country’s financial crime watchdog.
The decision was based on a report presented in August 2022 by Adam Bell SC, which handed down his findings into The Star casino’s suitability to hold a casino licence in New South Wales (NSW).
The review report, known as the Bell Review, is a three-volume final report which presents an interesting case study for in-house lawyers on the importance of having clearly defined roles and responsibilities, the risks of overburdening individuals and legal teams in an organization, reporting requirements, regulatory and legal compliance and having adequate risk and compliance measures in an organization.
Today a report was issued by the NSW Gaming Minister on the implementation of recommendations from the Independent Review, in which the authority states that in total 22 of the 30 recommendations have been implemented while eight remain in progress.
‘It is important to note that many of the recommendations are multi-faceted, with complex workstreams which require longer time frames to allow for effective implementation and monitoring. In addition, many of the recommendations are expected to be built into The Star’s remediation plan which is in the process of being finalized,’ the report adds.
In an announcement issued today, The Star indicated it continues to engage with the ‘appointed manager and relevant regulators in relation to its remediation initiatives’.
A challenging year
The CEO and managing director of Australian gaming operator The Star, Robbie Cooke, described the previous 12 months as “extremely challenging” for the group and vowed to improve oversight culture within the company.
“To say it has been a challenging year completely understates the lived experience at The Star over the last 12 months. The consequences flowing from the damage to our social license are felt daily by team members on multiple levels, reinforcing the critical need to understand the privilege and responsibility that comes with holding a casino license,’ Cooke pointed out in the company’s financial report.
“The ancillary challenges that have arisen in the year, and there are many, all follow from the breaches of trust identified in the Bell and Gotterson reports,” notes the CEO.
“As a team we are determined to earn back the trust and confidence of our community including our regulators, governments, shareholders, employees and guests. We fully understand the responsibility involved in holding our licenses and are committed to transforming our leadership and culture. This journey has started and we know there is still a lot to be done,’ Cooke added.
‘Remediation is our number one priority. We have commenced the uplift in our risk management, safer gambling and AML capability and are starting to embed greater accountability and more robust governance. We have invested in enhancing our control environments and are operationalizing and embedding these controls’.
Cooke pointed out that the company is improving its financial crime management and overall approach to harm minimization, with a remediation program to track and hold the company accountable to its multi-year program.
Protecting jobs
The Star Entertainment Group Limited, formerly known as Echo Entertainment Group, owns and operates The Star Sydney, The Star Gold Coast, and Treasury Brisbane.
The Star recorded a statutory net loss of some AU$2.44 billion ($1.57 billion) for its financial year, a stark increase from the AU$203 million ($130.6 million) loss registered in the previous year.
Star Entertainment Group cut 500 jobs in March, blaming a NSW tax increase on poker machine profits for the company’s financial troubles. This led the NSW to enforce a “transitional” tax levy for the next seven years in exchange for the company to to protect 3,000 jobs for the next six years as it transitions to a sustainable business model, a decision hailed by Cooke.
“The resolution of the NSW casino duty proposed increase has removed significant uncertainty in relation to FY24 and beyond for our Sydney operation and has protected the jobs of thousands of NSW team members,” The Star CEO added.
