Star Casino in Australia Faces License Cancellation and $100 Million Fine

September 13, 2024 Australia Casino & Hotel

Star Entertainment has been given 14 days to demonstrate why it should not face further disciplinary action.

Star Entertainment is facing severe repercussions, including a potential license cancellation and a $100 million fine, after receiving a show cause notice from the NSW Independent Casino Commission (NICC). This notice, issued on September 13, 2024, follows the findings of a second inquiry that recommended the Sydney licence should not be reinstated.

The NICC’s action comes after Star’s Sydney license was initially suspended due to serious anti-money laundering and counter-terrorism failings. Although the casino continued operating under the oversight of a regulator-appointed manager, the recent probe uncovered further issues.

The commission’s show cause notice cites four major breaches detailed in the second Bell Report. These breaches include a significant cash fraud at The Star, failure to conduct source of wealth checks on high-risk members, and fraudulent entries in guest welfare records. The NICC has expressed concerns about the casino’s management, operational culture, and the effectiveness of its remediation efforts.

“The notice relates 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 said in a statement cited by the Australian publication Northweststar.

The potential disciplinary actions against Star include the cancellation of its license, a fine of up to $100 million, changes to license conditions, an enforceable undertaking, or a letter of censure. The second inquiry led by Adam Bell found that since the initial 2022 investigation, Star had missed opportunities to rectify issues and had committed several compliance breaches.

Among these breaches was a $3.2 million fraud that allowed clients to claim unearned funds due to a software glitch in “ticket in, cash out” machines. Other violations involved ignoring rules intended to protect vulnerable patrons by enforcing three-hour limits on gaming without breaks.

Following the release of the second probe’s findings, Star Entertainment’s trading on the ASX has been suspended, and the company failed to issue a financial statement by August 30.

In response to the NICC’s notice, Star Entertainment stated it is actively engaging with stakeholders, including state governments, regulators, and lenders, to address its financial situation. “These discussions are ongoing and involve, among others, state governments, regulators and the company’s lenders,” the company said in a statement to the ASX late Wednesday. The Star expects to respond to the notice by September 27.

Star Entertainment now faces a critical period as it works to address the NICC’s concerns and resolve the issues highlighted in the latest investigation.