Star to keep Sydney casino but remain under govt supervision

The powerful NSW casino regulator will allow Star Entertainment to keep its Sydney casino open but the group will remain under close government supervision.

Star Entertainment will be able to keep its Sydney casino operating, but will have to pay a hefty fine and remain under the close supervision of government regulators until at least March.

The NSW gaming regulator on Thursday said it will prolong the suspension of Star Entertainment’s casino licence following the findings of the Bell II inquiry.

The NSW Independent Casino Commission-appointed manager Nick Weeks will continue to have oversight of its casino operations until at least March, the regulator said.

NICC Chief Commissioner Philip Crawford said the inquiry had identified continuing compliance failures and operations at The Star that fell far short of suitability.

“Despite more prescriptive supervision that prevented the type of misconduct seen in the first inquiry, numerous shortcomings in governance, regulatory compliance, technology and risk management remain, including in areas that The Star claimed it had remediated,” Mr Crawford said.

“Reform in the systems, policies, processes and culture that support these areas cannot be understated in a business as complex as The Star’s. In a casino setting, compliance breaches can have serious consequences for the community.”

The NICC last month issued a show cause notice against The Star following the findings of the inquiry that showed continuing regulatory missteps by the group as well as increasingly serious financial challenges.

The NICC said the notice seeks a response as to why it should not take disciplinary action against Star in respect of breaches substantiated in the Bell II report.

The regulator said four significant breaches had been detailed in the report by Adam Bell SC, 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.

New Star Entertainment Group chief executive Steve McCann.

Disciplinary options available to the NICC included cancellation of the licence, and a pecuniary penalty of up to $100m. The commission could also decide to amend the terms or conditions of Star’s licence, or require an enforceable undertaking on its future actions.

The NICC last month it would consider The Star’s transformation progress, including management, operations and culture, and analyse whether the company has the financial resources to properly discharge its obligations.

Star reported 2024 losses of $1.69bn after $2.44bn in red ink in the prior corresponding period, as it continued to battle regulatory costs and challenging trading ­conditions.

New Star chief executive Steve McCann is looking to slash up to 350 jobs and offload hotels and other assets after warning the company was “on its knees”.

Star Entertainment Group’s auditors have raised red flags about its ability to continue as a going concern with expenses related to the new Queen’s Wharf casino precinct a key issue.

Star also has warned earnings uncertainty arising from loss of market share, financial crime remediation and the impact of casino operating reforms cast significant doubt on the group’s ability to continue in business.

The phased opening of the $3.6bn Queen’s Wharf project in Brisbane, which has faced cost overruns and delays, also continues to dog the company.

Originally published as Star to keep Sydney casino but remain under govt supervision