Two Australian states, two massive fines. Star Entertainment recently received a fine of AUD100 million (US$67.92 million) from New South Wales (NSW) for repeated rules violations, and the casino operator will now have to pay Queensland the same amount.
For years, Star and rival operator Crown Resorts did whatever they had to do to make money, even if it meant laundering money for known criminals or breaking international rules. Then, an exposé by Australian media outlets pulled back the covers and revealed the truth.
That set off a chain reaction of inquiries across Australia that continues today. Queensland recently concluded its investigation and has now determined what will happen next.
Star Gets Suspended Sentence, Massive Fine
Star is going to have to pay Queensland for “major failings” and breaking anti-money laundering (AML) rules for years, according to ABC News. The company will also temporarily lose its license in the state, which had allowed it to operate the Star Gold Coast and Treasury Brisbane.
However, the 90-day suspension is on hold for 12 months. If Star can show that it has cleaned up its act and is able to comply with the rules, the suspension won’t be forced.
If any new violations emerge, however, the casinos may have to shut down for three months. That could also have an impact on the AUD3.6-billion (US$2.43 billion) Queen’s Wharf project, where Star is building a massive new resort.
In addition, a new independent monitor will come in and oversee Star’s operations. This is similar to what NSW did when it took enforcement action against the operator.
The newly-formed NSW Independent Casino Commission (NICC) assigned an outside administrator, Nicholas Weeks, to oversee the Star Sydney’s operations. He will also oversee the company’s activity in Queensland. Assisting him will be Terri Hamilton, an expert in risk management and AML matters.
Star tried to bring in one of its own monitors, as well, but the NICC rejected the plan. The company is responsible for covering all expenses related to the monitoring.
NSW and Queensland aren’t alone in their attacks on Star. The Australian Transaction Reporting and Analysis Center, the country’s financial regulator, is also moving forward with civil sanctions against the company and at least one executive.
Long List Of Violations
For years, Crown and Star directly or indirectly facilitated money laundering in their casinos, according to the findings of multiple inquiries. In addition, they allowed Chinese gamblers to make use of a money card, the China UnionPay card, to gamble, knowing that this was in violation of Chinese laws.
In order to circumvent the controls on the cards, the casino operators fabricated bills for hotel stays. The money spent on those stays was actually used on the gambling floors.
Some people, like anti-gambling evangelist Tim Costello, believe the fines don’t go far enough. Instead, they want the casinos to be shut down, at least temporarily. However, the revenue they provide to the states makes this more problematic for proper government functionality than it would serve as a lesson for the operators.
Crown and Star aren’t the only operators to find themselves in a bad situation with regulators. New Zealand’s SkyCity Entertainment Group, which operates the SkyCity Adelaide in Adelaide, South Australia, could also face multimillion-dollar fines for similar violations.
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