The Star Entertainment Group has been judged unsuitable to possess a gambling permit in New South Wales. They have a fortnight to respond to the conclusions before facing disciplinary measures.
The report by Adam Bell SC emphasized a comprehensive catalog of shortcomings by The Star Sydney casino in hindering money laundering and fostering social accountability. These shortcomings encompassed various domains and business procedures.
The report determined that these widespread failures stemmed from inadequate risk management and leadership. It also indicated a dysfunctional atmosphere that condoned unethical conduct, prioritized earnings over adherence, embraced hazardous practices, and suppressed unfavorable data.
The catalog of operator misbehavior is not comprehensive, encompassing successful evasion of Chinese capital flight regulations, such as mislabeling gambling expenditures as lodging costs on China UnionPay (CUP) cards, concealing these payments from financial institutions, permitting entities potentially connected to organized crime to manage cage operations at the operator’s Star casino, and deceiving and withholding paperwork from the state regulator, the Independent Liquor and Gaming Authority.
The newly formed NSW Independent Casino Commission (NICC) is in charge of deciding the kind and form of disciplinary action taken against casinos. The NICC is a newly established statutory body that has assumed the ILGA’s oversight of the casino industry.
In a statement accompanying the report, NICC Chair and ILGA Chair Philip Crawford expressed emotional response: “Honestly, this report is alarming. It provides evidence that the Star casino has widespread compliance problems in key areas of its operations.
“Not only was the casino masking significant sums of money as hotel expenses, but in many instances, large amounts of cash escaped anti-money laundering protocols, most concerningly through the Salon 95 – a secret room with a second cash cage.
“We are evaluating the contents of the report. The 30 suggestions include a variety of effects that need to be addressed individually.”
The regulator will determine the appropriate disciplinary measures after Star Entertainment provides a response to the official notification, Crawford stated.
Crawford also highlighted recent changes that have granted the regulatory body the authority to act on the Bell Report.
“Recent legislative changes implemented by the New South Wales government have fortified the regulatory framework, empowering us to take action based on the Bell Report. Our potential actions include license withdrawal, temporary cessation of operations, financial penalties, and/or the appointment of an administrator.”
**Notice to Explain**
Alongside the report, the NICC also issued a “show cause” notice to Star Entertainment. This notice serves as a directive outlining the specifics of the alleged impropriety and demanding an explanation from the recipient. Star Entertainment has a 14-day timeframe to address the accusations before disciplinary action is taken.
While the casino is likely to face some form of enforcement action – which, according to the Casino Control Act 1992, could encompass censure of the operator, financial penalties reaching A$100 million (£59 million/US$69.1 million/€69 million), and suspension or revocation of the operator’s casino license – the precise nature of the action remains uncertain.
The notice asserts that, based on the report, “Star Entertainment is currently deemed unsuitable for involvement in or association with the management and operation of a casino in New South Wales.”
Several days prior to the report’s publication, Star Entertainment halted its ASX trading in response to media reports suggesting its license was in jeopardy.
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