Pokies closure hits troubled Star

Star Entertainment is facing major disruptions to its electronic gaming business as a glitch hits the troubled casino operator’s move to cashless gambling.

Star’s move to cashless gaming is part of stricter regulatory requirements to reduce the risk of money laundering and other criminal ­activity.

Star Entertainment’s move to cashless gambling has hit a major glitch, forcing the troubled casino operator to shut its pokies and electronic gaming machines indefinitely.

The company told the ASX that, following planned upgrades to Star’s systems in readiness for the introduction of cashless gaming, “certain systems have been disrupted due to system performance issues identified in post-upgrade testing”.

The glitch had resulted in the decision to switch off all electronic gaming machines and electronic table games from Saturday until the issue was resolved.

“The decision was taken by The Star to ensure compliance with relevant regulations, and to maintain the company’s commitment to safer gambling procedures,” Star said.

It said it was working closely with its external provider to address the operational issues as soon as possible and would provide an update once operations had returned to normal. The Treasury Brisbane, The Star Gold Coast and The Star Sydney remained open, with table games, restaurants, bars and entertainment available.

The move to cashless gaming is part of stricter regulatory requirements to reduce the risk of money laundering and other criminal ­activity. Star shares fell 1 per cent to 50.5c on Monday.

Star’s average monthly revenue from electronic gaming ­machines reached $58.4m in the first half of the 2024 financial year, compared to $55m from domestic tables and $30.2m from non-gaming activities.

The disruption is the first big challenge for new Star chief executive Steve McCann, the former boss of Crown Resorts, who is moving to rebuild the company’s reputation following a series of regulatory missteps.

Star shares have lost almost 50 per cent of their value over the past year amid concerns about the company’s financial future.

Star is facing a multitude of challenges, including the imminent opening of the long-delayed Queen’s Wharf in Brisbane, and regulatory hurdles that still need to be ­resolved following the Bell II inquiry.

Adam Bell SC is expected to report to the NSW Independent Casino Commission by the end of the month on whether Star is suitable to retain its Sydney casino licence.

Mr Bell conducted his second inquiry earlier this year following his first probe in 2022 that found the company had not met its obligations to prevent money-laundering. Star’s casino licence in Sydney was suspended indefinitely on October 22, 2022. Mr Bell’s second inquiry unveiled continuing regulatory missteps, including a $3.2m fraud by customers and the falsification of welfare checks on problem gamblers.

In NSW, Star is mandated to make all gaming machines cashless by August 30, while under new regulations in Queensland players must obtain a gambling card after having their identity and age verified, and swipe or tap the card before they can gamble, even if they are using cash to do so.

The NICC said cashless gaming provided a direct means of monitoring a patron’s source of funds and limiting the opportunity for money laundering or terrorism financing. The regulator said cashless gaming also would allow patrons and the casinos to monitor gaming activity and implement strategies such as setting time and spend limits.

Star is moving to replenish its executive ranks in the wake of a raft of resignations in recent months. On Monday, the company confirmed the appointments of Neale O’Connell as interim group chief financial officer and Janelle Campbell as chief executive of The Star Sydney.

Mr McCann’s experience in steering Crown Resorts out of similar regulatory problems has been welcomed by shareholders and regulators.

The NICC said last month it was “encouraged” by Mr McCann’s appointment.

“Mr McCann’s experience in navigating the complexities of remediation will serve The Star well as it prepares for the challenges ahead,” an NICC spokesman said.