After New South Wales (NSW) wrapped up its inquiry into Star Entertainment, it gave the casino operator two weeks to explain why it shouldn’t lose its license. The response is in, and Star has issued a reverberating mea culpa as it hopes to avoid a worst-case scenario.
Star, which has acknowledged that it facilitated money laundering at its casinos for years, risks a license suspension in NSW. The same happened to Crown Resorts when it fell for the same reasons.
Like Crown, though, it’s likely the suspension would only be temporary, not permanent as some believe it should be. Star said in a statement that it accepts the inquiry’s findings and that it is already making major changes to become a law-abiding citizen of the corporate world.
Yesterday’s Star Is No More
Star highlighted in its response the various measures it has already introduced in order to appease regulators. These include a divorce from junkets, as well as enhanced security and surveillance.
The latter hints at the “secret” money exchange room, Salon 95, at the Star Sydney casino. Junket operator Suncity Group controlled the space even after former Star CEO Matt Bekier told regulators it didn’t. Suncity is also in trouble, with founder Alvin Chau standing trial for illegal gambling, money laundering and other crimes in Macau.
In addition to the corrective measures it has implemented, Star’s new executives and board members have developed a new plan of attack going forward. Interim board chairman Ben Heap is driving changes to bring the company into compliance with financial and gaming regulators.
Part of that plan includes around 130 steps, but will take two years to complete. Star has reached eight of those, according to its announcement. It expects to complete 29 more before the end of the year. Among these are a new independent compliance committee and the departure of executives, several of whom have already resigned.
In an effort to show that the company was already working to overcome its deficiencies, Heap highlighted the inquiry’s findings. He pointed out that it showed that Star had already begun making changes prior to the launch of the formal investigation.
Star is also facing a similar situation in Queensland over the same charges. However, because of its involvement in the Queen’s Wharf project, losing its license in the state is likely not an option there, either.
Calls For a Second Chance
As NSW decides what to do, and because it’s on the road to recovery, Heap recommended to the NSW Independent Casino Commission (NICC) that it keep its license. He said that Star wants to work closely with the regulator in order to reform its operations and show that it is taking its responsibilities seriously.
Philip Crawford, who heads the NICC and previously led the NSW Independent Liquor & Gaming Authority, isn’t easily swayed. When the inquiry concluded, he called Star’s arrogance “breathtaking.” He added that the company has a history of willfully avoiding “the right level of transparency.”
The NICC will reportedly make the final call on what happens to Star’s NSW license. The head of the state, Premier Dominic Perrottet, doesn’t want to influence the agency’s decision. However, he stated that Star’s actions were “completely unacceptable.”
The process is now in the hands of the NICC. It is reviewing all of the details, including Star’s most recent input, before it issues its decision. It’s now a waiting game, as the regulator has not indicated when it will announce its verdict.
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