By Amelia McGuire
Star Entertainment Group’s boss Robbie Cooke says he is committed to rebuilding the company’s reputation after having its Sydney casino licence suspended for failing to stem criminal activity and money laundering.
Cooke, who started at Star on Monday, conceded it had been a “very weird” first day in the office, telling this masthead he was heartened by the NSW casino watchdog’s faith in him, and Star’s ability to regain the Sydney licence.
The NSW Independent Casino Commission on Monday also imposed a record $100 million fine on Star. However, it decided against permanently revoking Star’s licence to operate in Sydney. Instead, the casino will continue to operate under an independent manager.
“It was heartening, but the reality is I won’t be happy until we get the business back to suitability, and I’m not going to rest on any laurels until we get there,” Cooke said.
New Star boss Robbie Cooke faces a huge job.Credit: James Alcock
He added that the $100 million fine was “very significant” and rejected claims that the regulator had not gone hard enough with the penalties imposed.
Cooke said that imposing a crippling fine would have had unintended fallout on Star’s overall workforce.
“[Fines] are not designed to destroy a business, we are a major employer, and we need to be able to retain net earnings and continue operations to sustain employment,” he said.
The penalties announced by NSW Independent Casino Commission head Philip Crawford on Monday morning followed a lengthy inquiry by Adam Bell SC which found The Star unfit to hold its licence in September. The public inquiry was launched after a 2021 investigation by The Sydney Morning Herald, The Age and 60 Minutes alleged The Star enabled suspected money laundering, organised crime, large-scale fraud and foreign interference in its Australian casinos.
Wexted Advisor’s Nicholas Weeks has been appointed as independent manager of the Sydney casino, effective from 9am on Friday. Under the conditions of the suspension, the casino will still be able to trade, with Weeks now holding the licence. The $100 million fine was first revealed by this masthead on Sunday.
The Star has been issued a record penalty by the NSW Independent Casino Commission.Credit: Oscar Colman
Crawford said the commission had decided to continue the casino’s operations to protect the livelihoods of The Star’s 8,000 employees but was adamant the group remains unsuitable to hold the coveted licence. Weeks will hold the licence for at least the next 90 days, but it’s expected the process to restore The Star’s management back to suitability will take longer. The regulator may retire the manager at any point after the 90-day period.
Phil Crawford, chief commissioner of the NSW Independent Casino Commission, says Star shows genuine contrition.
Crawford said he is confident that Cooke, the former boss of Tyro Payments, will be able to work with Weeks to steer a new chapter for the formerly “leaderless” casino. He said Weeks is the “best person in the country” to manage the group having formerly worked as the executive manager of rival Crown Resorts’ transformation and regulatory response.
The $100 million fine is the maximum penalty possible under laws introduced by the NSW government in August and exceeds the $80 million fine slapped on Crown Resorts by Victorian gaming authorities earlier this year.
Crawford also dismissed assertions the regulator had not gone far enough, arguing the casino group’s one asset is the coveted licence it no longer holds. “I would assume that’s causing some degree of angst amongst bankers … and stakeholders in that business,” he said.
The Star said on Monday it had various sources of liquidity available to it to pay the fine over a period yet to be determined by the commission.
Weeks was one of the advisors appointed to brief the commission about The Star’s operations in July. Crawford said in August The Star had been “breathtakingly arrogant” in its dealings with the regulator, the Bell inquiry and the advisory firm but said on Monday their approach had changed.
“We found them very adversarial during the whole of the inquiry... Their mindset wasn’t anywhere near cooperative in terms of getting the job done,” he said, adding Chairman Ben Heap had since proved he was a “decent” person who was genuinely trying to remediate the group, as demonstrated by his letter to shareholders last month.
“They need to do a root cause analysis, and we want to see a much more thorough investigation of the cultural issues at the engine room driving this company,” Crawford continued.
In response to the report, the casino group said it was willing to do “whatever necessary” to restore its suitability as an operator and appointed an independent monitor as well as committing to a cultural overhaul.
The renewal plan, scheduled to be completed by the end of 2024, will be run by an executive sponsor and tracked by international law firm Allen & Overy, which will act as the group’s independent monitor.
John Ayoub- portfolio manager at major Star Entertainment Group shareholder Wilson Asset Management-said the regulator had delivered a “fair and reasonable” outcome for all parties, which provides The Star a pathway to remediation. He added that other businesses in the gaming sector should be subject to the same scrutiny.
“I think the special manager will be expanded to the sector across the board, including pubs and clubs. I don’t see that role going any time soon” he said.
“There are other parties who have gotten away with reprehensible behaviour under the regulators watch. The Star is changing, the regulator has changed, it’s time for those sectors to be investigated too,” Ayoub continued, adding he thinks the new penalties mean The Star could be the closest out of all wagering entities to remediation.
Ayoub said shareholders have already suffered enough by the disruption to operations at The Star but the business still has “significant value”. He expects the casino group to regain the licence in some time.
Transparency International Australia chief Clancy Moore said the decision showed due diligence requirements for casinos must be strengthened, and the Commonwealth should consider establishing a national regulator.
The Star entered a trading halt on Monday morning and reopened in the afternoon, closing 1.54 per cent higher at $2.60.
The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.