Senior Star Entertainment managers who have resigned were responsible for the company's poor handling of a report warning it could be violating the law, a lawyer arguing on behalf of the company has told an inquiry.
The NSW Liquor & Gaming Authority is conducting an inquiry into whether the embattled company should be able to keep its Sydney casino licence.
After months of hearings examining claims the casino enabled suspected money laundering, organised crime, fraud and foreign interference, Kate Richardson SC is closing the casino's case.
She has told the inquiry the company was probably not fit to hold a casino licence in the past, but is now after the departure of some senior staff and reforms to its processes.
Since the inquiry began there has been a clean-out of Star top brass including chief executive Matt Bekier, and chief legal and risk officer Paula Martin.
Ms Richardson told the inquiry on Wednesday Star had improved its compliance with anti-money laundering and counter-terrorism financing laws since Mr Bekier rubbished a report warning the casino risked non-compliance in 2018.
The authors of the report from consulting firm KPMG told the inquiry Mr Bekier was rude and hostile towards them after receiving the report.
Ms Richardson told the inquiry the former CEO's reaction was unfortunate and should not stain the whole company.
Prior positive reports about the company's compliance could have spurred Mr Bekier's reaction.
"It does explain the initial shock and the immediate desire to understand why KPMG had reached such a different set of conclusions and recommendations," Ms Richardson said.
The KPMG report was not shared with the state's gaming authority, as the topic was considered the remit of the Australian Transaction Reports and Analysis Centre, which later pushed to see a full version of the report.
Ms Martin had advised the use of legal professional privilege, which she accepted at the inquiry was an erroneous claim.
"The conduct was principally attributable to Ms Martin, who has since resigned," Ms Richardson said.
"She should have at least obtained independent legal advice as to whether the claim was correct."
While there was no obligation or request to disclose the report to the gaming authority, it should have been shared in the interest of transparency, Ms Richardson said.
She planned to submit that the review not make findings on Star's claims of professional legal privilege on documentation.
The company accepted there was evidence some members of the legal team marked communications with third-parties as privileged without considering whether privilege could be claimed.
But on procedural fairness grounds, Ms Richardson argued other documents before the inquiry marked as privileged were not scrutinised and other senior Star staff not asked to justify why the privilege had been claimed.
Earlier in her closing submissions, Ms Richardson conceded the casino acted "indefensibly" in dealings with National Australia Bank over a controversial debit card scheme through which $900 million was channelled.
Ms Richardson submitted the casino also failed on reporting to the board about problems in its VIP room Salon 95 where notorious gang-linked junket operator Suncity had an exclusive access deal, and where an illegal cage operated.
She said if Star's board had known about issues in Salon 95, it would have shut the room down and suspended the casino's relationship with Suncity, describing the failure of managers as a "significant breach" of the board's trust.
