Why Star’s Sydney casino is being fined $100 million and getting its licence suspended
The NSW casino regulator has suspended the gaming licence of Star Entertainment’s Sydney casino and slapped the embattled company with a record $100 million fine for compliance failures.
Independent Casino Commission Chief Commissioner Philip Crawford announced the hefty penalty on Monday, saying the entertainment venue at Pyrmont could remain open without gaming.
“We’ve decided to impose a fine of $100 million on The Star, and secondly, to suspend the Star’s casino licence,” he said.
The suspension is effective from 9am on Friday.
Mr Crawford says it’s the first time in NSW history that a casino suspension has been imposed.
“A serious step has been taken,” he said.
“It’s giving a real message to the industry that gambling in this country is not illegal but it’s got to be done by certain rules.”
Why has Star’s license been suspended?
by Adam Bell SC, which found The Star was unfit to hold a casino licence after an inquiry identified a litany of compliance failures.
These included a notorious gang-linked junket operator running an illicit cage at the casino.
The commissioner referred to some $900 million laundered through China Credit Union Pay as a serious shortcoming, saying it was hard to quantify how much had been laundered through Star’s high-roller room Salon 95.
He said the harsh penalties were imposed because he was not satisfied with Star’s reform plan.
NSW parliament passed laws boosting the maximum penalty to $100 million only last month, up from $1 million.
“The remediation plan contained in the Star’s submission did not make much sense without the leadership of a competent and experienced CEO,” Mr Crawford said.
“Star’s new CEO, Robbie Cooke, commences at Star today. He presents to us as someone who is absolutely capable of providing the strong leadership needed at the Star.”
But an urgent “root cause analysis” was needed before any serious discussion of regaining the licence could begin, Mr Crawford said.
“The social contract was breached very badly… and now it’s up to them (Star) to .. .restore that confidence,” he said.
“Without leadership, this remediation plan is probably useless.”
New manager appointed
Nick Weeks of Wexted Advisors has been appointed as manager to ensure that “the Star casino will remain open and all staff will remain employed”.
Without the appointment of a manager, thousands of Star employees would have lost their jobs overnight.
“At this point, the commission did not consider this to be in the public interest,” Mr Crawford said.
“There are probably about 10,000 employees of the Star Casino. And a lot of them rely on the income to pay their mortgages and raise their kids.”
The manager’s initial stay is for 90 days and can be extended.
Net earnings from gambling will be remitted to staff to enable it to continue to run.
“We’re not setting this managership up on the basis that it’s likely to fail. We want it to succeed,” Mr Crawford said.
Ahead of the commission’s decision, Mr Cooke had vowed to rehabilitate the gambling and entertainment company.
“We need to be putting compliance at the top of the list and if you do that, it protects shareholder value,” he told AAP last week.
“There’s definitely some challenges in the business,” he said.
Mr Cooke vowed that “compliance will be put ahead of profits” under his leadership, adding that “cultural change won’t happen overnight”.
“My big focus to deal with those issues is my commitment to our regulators, to our government partners, to our 75,000 shareholders, 8000 team members and the community at large to rebuild trust.”