Casino watchdog savages Star, Australia’s casino regulator has launched an unprecedented attack on Star Entertainment Group for failing to remove key managers responsible for throwing the company’s “moral compass out the window” while describing some board members as not up to the job.
The swingeing rebuke of Star by the head of the new NSW Independent Casino Commission Philip Crawford also singled out its acting chief executive Geoff Hogg, who was not in the role when Star’s misconduct took place, savaging his recent comments about allowing an organised crime figure banned from gambling in NSW to frequent its Gold Coast casino.
The criticism came as the inquiry Crawford commissioned to probe the casino giant found it unfit to run a Sydney casino, an outcome that means the gaming giant has 14 days to convince the regulator why it should not lose its licence or be subject to other disciplinary action.
Crawford also flagged a fresh inquiry into Star’s ongoing failures, savaging the company for continuing to hide behind legal advice rather than act as a good corporate citizen.
Such an inquiry could be overseen by Naomi Sharp, SC Online Casino Games, and “focus on some of the stuff that really shouldn’t be there” at Star. He said Star lacked the ability to reform, meaning the loss of its licence was still “very much on the table”.
He said the company had for years engaged in a “conspiracy to make sure that they got away with and did things that they knew were wrong, and they threw their moral compass out the window”.
In an exclusive interview, Crawford gave the clearest indication yet of what Star will need to do to keep its casino doors open after the Bell Inquiry confirmed the accuracy of a 2021 investigation by the Herald, The Age and 60 Minutes that accused Star of having enabled suspected money laundering and organised crime in its Australian casinos for years, even though its board was warned its anti-money-laundering controls were failing.
The inquiry, led by Adam Bell, SC, found Star breached not only multiple branches of the Casino Control Act but its own internal control measures. Bell rejected Star’s eight submissions as to why it should retain its licence. Bell’s report found “a number of extremely serious governance, risk, management and cultural failures of the Star entities occurred”.
“The Star treated the [NSW Independent Liquor and Gaming] Authority with disdain, as an impediment to be worked around.”
Bell found the culture at Star was driven by profit, leading to practices that exposed it to significant risks including money laundering, criminals gambling and infiltration by organised crime.
Bell did not make any recommendations regarding which changes the Star need to be made to hold a casino licence, as it was not in the terms of reference. The NSW Independent Casino Commission will wait until after receiving Star’s show cause submission before deciding which action to take.
NSW Hospitality and Racing Minister Kevin Anderson described the casino’s operations as “disgraceful”.
“We are outraged as to the operations of this particular company. The flagrant disregard for the rules and regulations that they should be operating under is breathtaking,” he said.
However, he refused to be drawn on whether a failure of government regulation had enabled misconduct in the first place. “The commission will now receive the reports from Star over the next two weeks for procedural fairness, and the commission will have the power, the teeth and the ability to be able to impose whatever it requires to bring Star back into line.”
The government’s gambling reforms give the commission power to strip Star of its licence, suspend it, impose monetary penalties and appoint a manager.
Crawford also queried why corporate regulator the Australian Securities and Investments Commission (ASIC) had failed to take action against the former directors of Crown Resorts over its failings, and revealed he was “surprised” the Queensland government’s casino inquiry was so limited.
He said the introduction of cashless gaming cards to combat money laundering and organised crime across all Australian gaming outlets was “inevitable” and should be implemented over the next two years.
“I think the technology is not there yet, but once it picks up … I think that’ll permeate the whole industry in due course,” he said.
Crawford’s comments suggest he believes Star must remove Hogg, who has been with the company for several years but only took over the CEO role recently, along with a host of other key middle and senior managers and multiple board members. He suggested Star appeared unwilling to reform under its current management and board.
“There’s a real reluctance to become as transparent as they need to be if they want to hold a casino licence.
“Nobody has sat down at this company and said, ‘Should we be doing this?’ Their attitude’s always been, let’s find a way to do this.”
He said there was “still quite a number of people there who are implicated in the bad conduct. Now, our disappointment is at the moment the company itself hasn’t dealt with that – but we will.
“At the moment, there’s a lot of people still there [at Star] that have been promoted within the system. They’ve been promoted by the people who have now gone and it’s all very unhealthy … They [Star] have got to find a way, if they can, and I’m not sure they can, but trying to find their way back to satisfy the public that it is worthwhile putting some integrity and trust back into their business.”