In a pivotal move by Queensland’s regulatory authorities, Star, a leading casino operator, has been given a six-month reprieve on its previously imposed suspension deadline in the state. This extension comes on the heels of the operator’s acknowledgement of several critical failings in its operations. In December of the previous year, Star was subjected to significant sanctions in Queensland after it was deemed “unsuitable” to hold a casino license, a verdict that came after meticulous scrutiny of its activities at the Star Gold Coast and Treasury Brisbane establishments.
The gravity of the situation was reflected in a hefty AU$100.0 million fine, which epitomized the severity of Star’s contraventions. The initial directive required Star to rectify its shortcomings within 12 months, a deadline initially set to expire on December 1. However, the Queensland government has now agreed to extend this to May 31, 2024, allowing Star additional time to align its operations with regulatory standards.
In response to the looming deadline, Star proactively submitted a comprehensive draft remediation plan, outlining its framework to systematically address the issues at hand. The plan includes approximately 640 milestones, which span across 15 distinct workstreams and are slated for implementation over several years. This degree of meticulous planning appears to demonstrate Star’s commitment to overhaul its operations and restore regulatory confidence.
Queensland Attorney-General, Yvette D’Ath MP, ratified the remediation strategy and endorsed the extension. Additionally, the continuation of a special manager, appointed to supervise the overhaul at the casinos in Brisbane and the Gold Coast, has been extended by 12 months, ensuring oversight until December 8, 2024.
Star is now also mandated to provide the Queensland government with periodic updates on the progress of its remediation initiatives prior to the revised deadline in May 2024. Robbie Cooke, Star’s CEO and managing director, has expressed his satisfaction with the granted extension. He emphasized the company’s dedication to rectifying its mistakes and rebuilding its reputation within the Queensland community.
Cooke’s statement underlined a clear acceptance that the privilege of holding casino licenses comes with stringent responsibilities and not just entitlements. Star’s debacle in Queensland parallels issues brought to light in a separate inquiry in New South Wales (NSW) by Adam Bell SC. These investigations spotlighted deliberate attempts by Star to deceive banking institutions and regulatory bodies about the true intentions behind China UnionPay transactions, in direct violation of Chinese law.
Moreover, Star allegedly sought business from individuals with criminal connections, touting their patronage in defiance of police advisories. Issues extended to social responsibility oversights and lapses in anti-money laundering protocols along with historic involvement with junket operators.
The payment schedule for the penalty imposed on Star has been stipulated, with the final installment due by the end of 2023. This follows two preceding payments earlier in the year. It must be noted, however, that the granted extension pertains solely to Star’s operations in Queensland. The company remains actively engaged with the NSW Independent Casino Commission with respect to its Sydney operations and has indicated that a separate update on that front will be forthcoming.
Reflecting on a turbulent year, Star’s woes were compounded by the formal departure of Ben Heap as board chair, amid civil proceedings instigated by the Australian Securities and Investments Commission (ASIC) involving current and former directors, including former CEO and managing director Matthias Bekier. As Star faces these challenges head-on, it has initiated extensive restructuring plans and cost-saving measures, prompted by a stark downturn in operations termed as unprecedented, even outside the context of the Covid-19 pandemic.
This operational quagmire resulted in a staggering AU$2.40bn net loss for the year, following a writedown in the valuation of its casino assets. Significant expenses have been itemized, including regulatory and legal costs, debt restructuring, and redundancies.
In a pivotal reorganization strategy, Star is forging ahead with property-based operational business units, each to be headed by a CEO reporting directly to group CEO Cooke. In a recent appointment, Jessica Mellor assumed the role of CEO for Gold Coast operations. Amidst these developments, Star has also managed to secure favorable tax rates in NSW after engaging in negotiations with the government, which provides some relief as it navigates a sea of regulatory challenges.
