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The New South Wales (NSW) state gambling regulator has launched a second major inquiry into The Star Entertainment Group’s Sydney casino operations to determine if its efforts at compliance reform warrant its survival.
The NSW Independent Casino Commission (NICC) on Monday (February 19) said the 15-week inquiry, starting immediately, “will give The Star the chance to demonstrate its suitability to hold a casino licence”.
The inquiry is headed by Adam Bell SC, who led the first, devastating inquiry into Star Entertainment in 2022 that found the company unsuitable to run the casino. Bell also served as counsel assisting for the equally damaging Bergin Inquiry into Crown Resorts.
NICC chief commissioner Philip Crawford said the inquiry will follow up on the commitments Star Entertainment made to reforming severe defects in managerial compliance, its wider corporate culture and board oversight that allowed criminal infiltration and required the appointment of a special manager in lieu of a licence.
But the inquiry also reflects the NICC’s frustration over the failure to date of Star Entertainment and its NSW subsidiary to meet these commitments, he said.
“The NICC has had concerns about the extent that remediation is attributable to the manager’s oversight and direction versus what is being driven by The Star’s reform agenda,” Crawford said in a statement.
Bell’s report is due on May 31, one month before special manager Nick Weeks concludes his 20-month post, which included extensions.
The regulator will then determine if Star Entertainment has regained suitability and, if not, whether to cancel the company’s currently suspended licence or allow it to continue under a range of conditions.
“With June fast approaching, the NICC remains concerned that The Star has not made sufficient progress in key areas,” the NICC said in a separate statement on the inquiry.
“All options available to the NICC have significant commercial and public consequence and oblige the NICC to conduct a fair and forensic assessment of The Star’s response to the Bell Review and its success in remediating its business,” the NICC said.
Terms of reference for the inquiry include consideration of Star’s corporate culture, its financial resources, its management structure and “reporting lines”, and record of compliance since the first Bell report relating to internal control manuals.
The NSW government last week separately reached an agreement with Star on deferring major increases in slot machine duties in exchange for guarantees of at least 3,000 staff retaining their jobs until 2030.
The deal, flagged in August, suggested that Star Entertainment has a degree of sympathy in political circles, although it has not been enough to forestall the high degree of scrutiny of the “Bell Two” inquiry.
Star Entertainment is set to report half-yearly results this week and is awaiting the announcement of a severe fine, likely in the hundreds of millions of dollars, from the national financial transactions and money laundering watchdog AUSTRAC.
