Star wars: The dirty fight between the casino and its regulator

Management dysfunction, falsification of customer welfare checks, disclosure discrepancies, a plot for a coup, and a $3.2 million theft by patrons are just a taste of the fresh allegations made against Star Entertainment as a second public inquiry looks under the hood of the casino that is operating under an already suspended licence.

The first day’s hearing of the inquiry under Adam Bell, SC, paints a portrait of a public company at war with the regulator – the authority in whose hands sit the casino’s fate. It has the power to either reinstate the licence, have it continue with the current provisional status, or order complete disqualification.

Adam Bell, SC, chair of the NSW inquiry into The Star.

Day one of this inquiry makes for compelling listening for all but Star Entertainment shareholders, who must appreciate the catastrophic financial risks of losing its NSW licence. It certainly won’t be lost on pubs and pokies baron Bruce Mathieson, who holds more than 8 per cent of Star.

Given the explosive revelations and allegations made during the day one of the inquiry it is very difficult to imagine how the current board of Star will be able to mend its relationship with the regulator and navigate the path to restore its licence.

It has deteriorated into a grubby battle.

On one side of the boxing ring are the recently departed chief executive Robbie Cooke and the Star board. On the other is the regulator, the NSW Independent Casino Commission (NICC), headed by Philip Crawford, alongside the manager it had installed to oversee the rehabilitation of the casinos, Nick Weeks.

The inquiry heard Cooke and the chairman, David Foster, hatched a plot to engage shareholders in a class action against Weeks and the casino commission. This speaks volumes to the toxicity of the relationship.

Bizarrely, this is the board and management team that had been installed into Star to clean the place up after a 2022 regulatory inquiry by Bell found Star was unfit to hold a licence in NSW – describing it as a “case study of unethical conduct and cultural failure”.

Over four months, Bell’s first inquiry uncovered a laundry list of misconduct, including the casino company’s links with junket operator Suncity, which had an illegal cash cage on Star’s premises.

Day one of this inquiry makes for compelling listening for all but Star Entertainment shareholders, who must appreciate the catastrophic financial risks of losing its NSW licence.

In the wake of the first Bell inquiry, the Star executed the near-wholesale cleanout of its board and management, and Cooke took over as chief executive with a remit of overhauling its operations and culture. Weeks was installed as a special manager to oversee the rehabilitation.

But in the second half of 2023, a report by Weeks questioned the speed at which the casino was progressing against its plan.

Emails and texts between Cooke and Foster that emerged during Monday’s hearing pointed to the pair spying on Weeks’ diary as part of “preparing for war” with the regulator.

Weeks said Cooke and Foster had found out about meetings with his lawyers and regulators scheduled for February by “somehow accessing my diary”.

Former Star boss Robbie Cooke.Credit: Louie Douvis

And then there are the two versions of the recent departures of Cooke and the chief financial officer Christina Katsibouba. The announcement by the board to the Australian stock exchange gave the impression both these executives had resigned, but the company told the regulator both had been dismissed, the inquiry heard on Monday.

The announcement of Cooke’s departure contained his quote: “I have reached the conclusion that my continuation in the group CEO role is not going to be conducive to the NICC determining to find The Star capable of becoming suitable to hold a casino licence in NSW.”

Indeed, the inquiry heard that Katsibouba had been planning her departure since December, citing among other things dysfunctional management.

Cooke and Foster will get a chance to deliver their version of events when they are called to give evidence.

They will certainly be able to attest to the monumental challenges the company has faced over the past few years, dealing with a case from AUSTRAC and a number of class actions and the two equity raisings needed for Star to stay afloat financially.

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