Star fined $100m for Queensland casino breaches, 12 months to avoid licence suspension

The casino giant, which is also on notice for breaches in NSW, has a year to fix anti-money laundering and counter-terrorism financing issues if it wants to avoid a licence suspension.

Star has 12 months to fix issues at both its casinos in Queensland, including this one on the Gold Coast.

Star Entertainment chief executive Robbie Cooke is facing a race against time to turn around the troubled gambling group and regain its suitability to hold casino licences in NSW and Queensland, after the company copped its second $100m fine and suspension.

The Queensland government issued the blockbuster fine to Star on Friday, with the state’s Attorney-General Shannon Fentiman warning the group it had 12 months to “get their house in order” or face a lengthy ban.

The penalty follows a damning inquiry headed by former Court of Appeal judge Robbert Gotterson. The inquiry found the group disguised millions of Chinese gambling transaction as hotel charges, allowed gamblers banned in NSW to come to its Queensland casinos, and “lied” to state regulators – flouting anti-money laundering and counter-terrorism financing laws.

Ms Fentiman said if Star failed to prove it was a suitable casino licence holder by the end of the next year, the Queensland government would activate a 90-day suspension, which was also issued on Friday but suspended while Star completes its reformation.

“Star has 12 months to get their house in order if they do not want to see a 90 day suspension of their license,” Ms Fentiman said.

“Clearly what we saw coming out of the Gotterson review was there was that one-eyed focus on profits, where they did not really resource their anti-money laundering policies. They did not take it seriously, they allowed patrons excluded from New South Wales into Queensland casinos, and they lied to the regulator and their bank about the nature of China Union Pay transactions.

“They will need to put in place remediation works within their company to ensure that this never happens again, that there are strong checks and balances so that they are considered suitable to hold a casino license.”

Queensland Attorney-General Shannon Fentiman wants Star’s “house in order” in 12 months. Picture: John Gass

Ms Fentiman appointed Nick Weeks as Star interim manager – the same man the NSW government hired to oversee its operations at is flagship casino in Pyrmont.

She said the penalties would not affect Brisbane’s Queen’s Wharf development – a major residential, commercial and entertainment precinct being developed in the CBD – of which Star is part of the project consortium

Mr Cooke, who started at Star in mid-October – following an exodus of most of its senior management and directors – said he was confident that he would meet the Queensland government’s deadline to transform the company.

“We’ve got things wrong and we’re paying the price for it today,” he said.

“Our focus is getting the business back to suitability and to answer your question, yes, I do believe we can do it set down by the Queensland Attorney-General.”

The scope of the work involves overhauling the company’s culture to ensure it complies with anti-money laundering and counter-terrorism financing laws, particularly rules aimed at identifying the source of wealth of its high-rollers and other gamblers.

A seperate inquiry in NSW heard much of the wrongdoing at Star stemmed from the belief it was OK to break laws given other casino groups were doing the same thing.

The financial crimes regulator has also launched legal action against Star and its rivals Crown Resorts and SkyCity.

Mr Cooke declined to speak about other casinos, saying he could only speak for Star.

“Look, I’m not sure what drove the behaviours in the past. I can say in relation to our business, we are making the uplift to ensure that our AML (anti-money laundering) and know your customer processes are marketing leading.

“That’s the investment we’re making. We’re just looking at what we’re doing. We’re not looking at what others are doing. We are just getting our business right.”

Star has outlined its reformation in a 130-point plan, which has included engaging PricewaterhouseCoopers and Deloitte, and hiring 53 staff in its “safer gambling, financial crime, risk and compliance” functions. It has also employed 25 external financial crime specialists – lifting staff in that team to 56 people.

The Queensland penalty follows the NSW government issuing Star a $100m fine in October and suspending the licence for its Pyrmont casino. It is also facing more fines, potentially totalling hundreds of millions of dollars, after Austrac alleged the company continued to deal with accused criminals, including suspected a suspected murderer, sex slave traders and loansharks.

But Mr Cooke was confident the company had enough money to pay for the fines, despite its latest accounts showing it only has $82m in cash and its auditor warning that the company must shore up the confidence of its lenders to ensure it keeps the lights on across its casino empire.

Mr Cooke said the Queensland government had allowed the group to pay for the fine in instalments – with the final payment due in December next year, and hoped to strike similar deal with the NSW government. He also highlighted the company’s capacity to borrow more money.

“We’ve got $500m in liquidity available so I’m very comfortable about our capital position. That is not something that’s causing me any undue concern.”

Star’s shares firmed 0.6 per cent to $2.54 on Friday, giving it a market value of $2.42bn.

Penalties will not affect Brisbane’s Queen’s Wharf development, which will also house the new Star Casino. Picture: David Clark

Originally published as Star fined $100m for Queensland casino breaches, 12 months to avoid licence suspension