Star Entertainment sent staff to mainland China to lure gamblers to casino, despite Beijing crackdown

A marketing team from Star travelled to China to lure mainland citizens to its casino, and stopped after Crown staff were arrested for doing a similar thing, an inquiry hears.

Star sent marketing staff to mainland China from 2015 to October 2016, the Bell inquiry has heard. Picture: Gaye Gerard/NCA Newswire

Star Entertainment had a team of staff that travelled to China to lure mainland citizens to gamble and only ended the practice after 19 employees at rival Crown were arrested for engaging in a similar practice, an inquiry has heard.

From 2015 to October 2016, Star marketing staff travelled to mainland China to attract would-be cashed up gamblers to its casino, despite Beijing authorities launching a crackdown on foreign gambling advertising.

Star general manager finance and commercial Michael Whytcross told a royal commission-style inquiry, headed by Adam Bell SC, on Wednesday that the practice only ended following the Crown arrests.

“My suspicion would be … that it aligned with the Crown arrests, and they were in October 2016,” Mr Whytcross said.

Counsel assisting the inquiry Naomi Sharp asked Mr Whytcross, who was based in Star’s Hong Kong office, what the casino group’s staff were doing in mainland China.

“I believe they were speaking to customers around potential trips to … The Star casino.”

Mr Whytcross, who was previously Crown Resorts commercial manager, joined Star in late 2016. He was not able to say how many staff were travelling to mainland China to market Star but there was a “general awareness” at the company about what the team was doing.

“Although that predated my employment with The Star … (there was a) general awareness that there were staff … going into mainland China.”

Crown Resorts last year settled a shareholder class action for $125m last year after its share price plummeted 14 per cent in October 2015 following the arrests.

The 19 Crown employees pleaded guilty to gambling offences and were convicted in June 2017. Lawyers for the shareholders, claimed Crown knew the employees were acting illegally in China and the company engaged in counter surveillance, including code words, removing logos and misleading authorities.

The Star is now facing its own shareholder class action. Slater & Gordon filed the lawsuit in the Victorian Supreme Court following explosive evidence at the Bell inquiry, including that the casino had set up a secret gambling room for a Chinese junket operator with criminal links; concealed more than $1bn worth of highly suspicious banking transactions from NAB, contrary to anti-money laundering; while chief executive Matt Bekier dismissed an independent KPMG report about its anti-money-laundering program at a “hostile meeting”.

Slater & Gordon class actions senior associate Ben Zocco said: “For the last six years, Star has held itself out to be a model casino operator that took its obligations seriously and followed not only the letter of the law, but the spirit of the law.” “Star insisted that it took compliance seriously and ran its business ethically, honestly and with integrity. Our investigations to date, in addition to the extraordinary evidence revealed so far in the Bell inquiry, suggests that they did everything but,” he said.

Star is yet to provide comment about the class action.

It came after Mr Bekier resigned on Monday after helming the company for eight years, following “issues raised in the public hearings in connection with the review of The Star Sydney being undertaken by Mr Adam Bell SC”.

The inquiry continues.

Originally published as Star Entertainment sent staff to mainland China to lure gamblers to casino, despite Beijing crackdown