The NSW Independent Casino Commission (NICC) has issued Star Entertainment Group with a show cause notice, asking the embattled casino operator to explain why it should not take disciplinary action in relation to various breaches uncovered in the second Bell inquiry.
That inquiry and the report that came from it ultimately recommended a second finding of unsuitability against Star and its operation of The Star Sydney, and further compounding its already perilous financial position.
On Friday, the NICC said it had issued the show cause notice in relation to four significant breaches detailed in the second Bell Report, including one that resulted in a cash fraud against The Star, a failure to run source of wealth checks on hundreds of members flagged as high risk, and fraudulent guest welfare entries that put already vulnerable customers at higher risk of harm.
The NICC has also issued correspondence to The Star in relation to its management, operation and culture, the adequacy and implementation of its remediation plan, and The Star’s overall suitability to hold a casino licence, it said.
Among the possible disciplinary actions it could take against Star, which has 14 days to respond, are cancellation of its casino licence, a pecuniary penalty of up to AU$100 million, an amendment of the terms or conditions of the licence, a requirement that a casino operator, or a close associate of a casino operator, give an undertaking (an enforceable undertaking) to do or refrain from doing something, or a letter of censure to the casino operator.
In a filing, Star said it continues to consider its response to the Bell Report, including its ability to obtain financial resources to ensure the financial viability of the casino.
“The Star expects to respond to the Notice by Friday 27 September 2024,” it said. “The Star is currently considering the matters raised in the Notice, the additional requests by the NICC as well as the Bell Two Report.
“The Star is continuing to work with various stakeholders and advisers in respect of its financial position. These discussions are ongoing and involve, among others, state governments, regulators and the company’s lenders.”
As reported by Inside Asian Gaming, Star is actively trying to stave off collapse following the second finding of unsuitability in NSW and has asked the state governments in both NSW and Queensland for tax relief. The NSW government, which has already postponed a substantial increase in poker machine tax and granted an extension to the deadline for introducing mandatory cashless gaming, has rejected any further relief.
However, the Queensland state government is said to be considering some sort of assistance given that Star only last month held the Grand Opening for its AU$3.6 billion Queen’s Wharf Brisbane development – seen as a critical piece of tourism infrastructure for the city. Queensland is also home to The Star Gold Coast.
Star recently confirmed that ongoing discussions related to its troubled liquidity position have included considerations around the application of provisions in the Corporations Act 2001 (Cth), specifically the safe harbour provisions, which allow directors of a company to pursue restructuring rather than placing it into administration by offering protections against personal debt liability should the restructure ultimately fail.
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