Inside The Star Sydney’s high-roller room ‘Salon 95’

CCTV played at The Star casino inquiry shows a brown paper bag being filled with cash at the high-roller room. See inside ‘Salon 95,’

An Asian gambling junket with alleged links to money-laundering and drug-trafficking appears to have run a cash-handling “cage” inside a Star casino high-rollers’ room known as Salon 95, according to evidence given at a Sydney inquiry.

On Wednesday, counsel assisting the inquiry Naomi Sharp SC read out parts of a March 2018 email exchange involving Star Entertainment Group’s general counsel Oliver White and its NSW regulatory manager David Aloi.

Ms Sharp read the emails to witness Angus Buchanan – Star Entertainment’s diligence and intelligence manager. Mr Buchanan had referred to the emails in a document before the periodic independent inquiry, which is investigating whether Star remains fit to hold a casino licence.

Gaming taking places inside Suncity-run Salon 95 at The Star. Image: The Star independent review

In the email exchange, Mr Aloi wrote to Mr White saying he assumed gambling junket business “Suncity would have an AML (anti-money laundering) program in place prior to setting up a cash desk” inside Salon 95.

The inquiry had earlier heard that in 2016, Suncity struck an agreement with Star to exclusively operate Salon 95 at The Star Sydney.

Salon 95 was staffed by employees of Suncity who wore black suits, white shirts and black ties. One of the conditions of the Salon 95 agreement was that the room would turn over a minimum $50 million a month.

The inquiry was earlier told in April 2018, Australian law enforcement authorities believed Suncity was involved in illegal bookmaking in Hong Kong, as well as drug trafficking and “large-scale” money laundering.

Bundles of cash from the 'cage' at Star's 'Salon 95' are placed inside a brown paper bag. Picture: The Star independent review

However, this view does not appear to have been known to Star until 2019, when Mr Buchanan joined the company.

In the email exchange, Mr White responded that “any transactions involving cash must only take place at The Star Sydney’s cage. Accordingly, if one of Suncity’s customers wishes to make a (cash) payment they must do this at The Star Sydney’s cage in accordance with Star’s applicable policies.”

A cage is a special room for handling cash and casino chips.

Mr White continued: “On the basis that Suncity’s service desk does not and will not in future handle any cash transactions you should not worry about any AML and CTF requirements that may apply to Suncity’s operations as opposed to the operations of The Star Sydney.”

He told Mr Aloi: “If you become aware that Suncity are handling cash transactions please let me know ... please send an email to me including ‘privileged and confidential’ in the title and seek my advice on any incident including any details that are known.”

Star Entertainment Group's Angus Buchanan at the inquiry on Wednesday. Source: The Star independent review.

Mr Buchanan was then shown CCTV footage of Salon 95 from April 2018, provided by Star, which he had not previously seen.

In the footage, staff in black suits, white shirts and black ties moved a black bag. The bag was then opened, revealing bundles of $50 notes. The bundles were counted and placed in a drawer in an enclosed room within Salon 95.

Ms Sharp then asked Mr Buchanan, “do you agree that what we are seeing … is completely contrary to the instructions that Oliver White gave in the email ...”?

Mr Buchanan responded: “I agree it certainly appears to be.”

Adam Bell SC, who is leading the inquiry, then asked Mr Buchanan: “It looks as though Suncity are operating a cage. Do you agree?

Mr Buchanan said: “It would appear to be a very similar activity.”

He was later shown footage of cash being removed from a black backpack and taken into the enclosed room by a Suncity employee and a video of a brown paper bag being filled with cash in the enclosed room before being handed to a person in Salon 95.

Ms Sharp put to Mr Buchanan that it was a problem that the source of the large amounts of cash in Salon 95 were not known.

He agreed.

She then asked: “Isn’t another big risk here that money laundering is going on?”

“It is a risk,” Mr Buchanan replied.

“It’s happening with the premises of … Star Entertainment Group,” Ms Sharp said.

“That’s what it appears. I agree,” Mr Buchanan said.

The inquiry heard that Star launched an internal investigation into Salon 95 in mid 2018 and ended the agreement with Suncity in August 2019.

Mr Buchanan said it was his understanding that Star no longer deals with any junket operator.

Suncity’s CEO was arrested last year by Macau police and reportedly confessed to carrying out illegal virtual betting.

The inquiry continues.