Star Entertainment “is and remains unsuitable” to hold a licence to operate casinos in New South Wales, according to a long-awaited report.
Adam Bell SC published on Tuesday a series of damning findings about Star’s operations, following a lengthy inquiry that heard allegations of money laundering, organised crime, fraud and foreign interference at its gaming facilities in NSW.
The report contained 30 recommendations, including that a compulsory gaming card be introduced at the casino.
Releasing the report, the chief commissioner of the Independent Casino Commission, Philip Crawford, said Star had been issued with a show cause notice, and had 14 days to respond before he decided what action to take.
Describing the report as “shocking” and “confronting”, Crawford said the commission was considering all options available to it, including revoking Star’s licence to operate casinos in NSW, or fines of as much as $100m.
“I can say from the contents of the report, doing nothing is not an option,” he said.
He said Star “tended to ignore” risks associated with their conduct, and then “tried to hide” some of the outcomes.
“They incurred substantial risks around the following topics: money laundering, allowing criminals to gamble in their casinos, the infiltration by organised crime. And they paid scant regard to proper harm minimisation criteria.”
The report, Crawford said, detailed “very real risks of criminal infiltration” at Star’s operations, as well as “vast sums of cash” evading what Bell described as the firm’s “unsatisfactory” anti-money laundering policies.
Despite a series of high-profile resignations during the Bell inquiry, Crawford said the commission remained concerned about the “astounding” level of “institutional arrogance” at the company. He said the commission wasn’t “getting the vibe” that it had learned from its mistakes.
“There is still an unwillingness to show the right level of transparency,” he said.
The Bell report comes just a fortnight after the NSW government passed new laws in response to recommendations from the separate Bergin inquiry into Crown casinos.
Those laws – which established the casino commission – increased the financial penalties which could be imposed on the company for breaches of its licence.
The NSW minister for hospitality and racing, Kevin Anderson, on Tuesday pointed to those changes amid criticism of both the state government and regulator in allowing the issues revealed by Bell under its watch.
“We have responded with teeth to be able to clamp down on this particular behaviour, this rotten behaviour, this toxic culture that has been operating with Star,” he said.
On Tuesday Anderson refused to say whether the government would accept all of the recommendations from the Bell report, including that a compulsory gambling card be introduced at the casino should it keep its licence.
The report said carded play should be mandatory “for all gambling” at the casino “in a manner which ensures that patrons are identified and their exclusion status (if any) enforced”.
It found that although carded play was identified in the review “within the context of harm minimisation and responsible gambling”, such a measure would also have “other potential benefits, including assisting to combat money laundering”.
Anderson said he “hadn’t gotten into the details” of the report’s recommendations, but said he would “would with the [casino] commission”.
The report found Star’s board had repeatedly been “kept in the dark”, but also said it bore some responsibility for issues uncovered by the inquiry.
“The board should be responsible for setting culture. However, in relation to the matters investigated in this review, the board had little or no understanding of what people do at Star Entertainment ‘when no one is watching’,” Bell wrote.
Crawford said the commission remained concerned about Star’s internal culture and said he felt “a fresh set of eyes” was needed at the company.
“One of the problems with the rehabilitation of the Star is that the board, nobody on behalf of the company has yet undertaken a proper root cause analysis,” he said.
“I’m not sure they’ll understand what they’ve got to fix until they know what the problem was.”
The report found specific breaches of the Casino Control Act, as well as Star’s own internal control policies.
In a statement to the ASX on Tuesday afternoon, Star said it was considering the report and the matters raised in the concerns notice.
