The Star casino fined $100m, licence suspended following damning report

A casino will still be able to operate despite being fined $100m and having its licence suspended following a damning report.

Sydney’s The Star casino’s doors will remain open despite being fined a whopping $100m and having its licence suspended.

Adam Bell SC last month handed down a report that exposed alleged money laundering, organised crime links and fraud at The Star, with the NSW independent Casino Commission (NICC) subsequently finding it unit to hold a casino licence.

The $100m fine was issued by the NICC on Monday, the maximum penalty that can be given following tough casino regulation reforms that were introduced by the state government earlier this year.

The Star casino has been fined $100m and had its casino licence suspended. Picture: NCA NewsWire / Nikki Short

The massive penalty coincided with Robbie Cooke’s first day as the The Star’s new chief executive.

NICC chief commissioner Philip Crawford also confirmed The Star’s casino licence had been suspended, with Nick Weeks subsequently appointed as external manager to operate the casino.

Mr Weeks will hold a casino licence, meaning the The Star can still operate and its about 10,000 employees will not lose their jobs.

“The NICC has regard to the fact that had it determined to cancel the licence, thousands of Star employees would have lost their jobs overnight,” Mr Crawford said.

“At this point the commission did not consider this to be in the public interest.

NICC chief commissioner Philip Crawford said keeping The Star open was in the ‘public interest’. Picture: NCA NewsWire / Damian Shaw

“The appointment of the manager means that The Star casino will remain open and all staff will remain employed. It does not mean that the NICC thinks that The Star is suitable for a casino licence.

“At this point, the NICC considers a possibility that The Star could remediate its business to becoming suitable to hold a casino licence.”

Mr Crawford noted while the NICC had met with Mr Cooke and he seemed to have the “strong leadership needed”, it was not appropriate for a new chief executive to take on the casino’s challenges.

“I’m glad Robbie Cooke has arrived, but up to now, they’ve been a bit leaderless in that level,” Mr Crawford said.

The Star will have an external manager which means it can still operate. Picture: NCA NewsWire / Damian Shaw

“But he only arrives today and there was no way that we were going to not take action and appoint a manager where the CEO arrives at this point in time. He’s got a lot of work to do.”

Mr Weeks had been working with the NICC as a consultant for the last four months and been their “eyes and ears looking under the bonnet” at The Star.

“He’s well placed to understand some of the problems. He’s got good experience in this field. He’s respected by us, he’s respected by the current management of The Star,” Mr Crawford said.

“We’ve got confidence that he’ll identify the issues that need to be addressed.”

Mr Weeks was also formerly the NRL’s chief operating officer, while he was Crown Resorts’ executive general manager of transformation and regulatory response until earlier this year.

Mr Crawford defended the punishment’s severity and the casino being able to operate, saying The Star had lost its “one major asset”.

“The Star Casino Company that holds the licence in NSW has one major asset and that’s its licence, and that licence has been suspended,” he said.

The Star chief executive Robbie Cooke has a big job on his hands. Picture: AAP / Ric Frearson

“I would assume that is causing some degree of angst among bankers and a lot of people who are stakeholders in this business.

“They need to earn it back. It won’t automatically revert.”

The net profits and the net earnings of the casino's gambling operations will continue to go to The Star.

Mr Weeks will be manager for at least 90 days, though Mr Crawford noted it could likely last for a “quite a bit longer”.

The suspension of the casino’s licence will be effective as of 9am this Friday.

The Star Entertainment Group (TSEG) entered a trading halt ahead of Monday’s announcement.

NSW Premier Dominic Perrottet welcomed the NICC’s decision.

“We’re not going to have a situation where any corporation in our state does not follow the rules and regulations that are in place,” he said in a statement.

“What today clearly demonstrates is that the processes that we have in place are incredibly strong, that we have a strong regulator and the decision today, I welcome.

“My expectation is that obviously the licence won’t be renewed until circumstances are in place where they comply, and that’s what they should be doing.”

The Star’s employees will still have a job with the casino still being allowed to operate. Picture: NCA NewsWire / Damian Shaw

When addressing the report back in September, Mr Crawford said senior management and senior executives took “deliberate” steps to mislead their bank, their board of directors and the regulator.

“The report is, quite frankly, shocking. It provides evidence of an extensive compliance breakdown in key areas of The Star‘s business,” Mr Crawford said.

“It’s quite confronting, the steps they went to, to hide things and hide really bad behaviour.

“A repeating theme throughout the report seemed to be asking not whether something they were looking at doing was appropriate but how they could do it.”

TSEG accepted the findings of the report and said it had developed a “comprehensive” remediation plan.

“TSEG and The Star Sydney accept the findings of the Bell Report, including the finding of unsuitability,” Star executive chairman Mr Heap said in a statement issued on behalf of the board.

NICC chief commissioner Philip Crawford said the conduct was ‘confronting’ and ‘shocking’. Picture: NCA NewsWire / Damian Shaw

“TSEG and The Star Sydney also acknowledge the gravity of the conduct which is raised in the Bell report. TSEG has taken significant and urgent remedial steps, including increased risk, compliance, and security staff, approval of upgrades to surveillance technology as well as permanently exiting junkets and closing the Marquee nightclub.

“We intend to do whatever is necessary, in consultation with NICC, to restore The Star Sydney to suitability.”

Mr Crawford said if not for the letter Monday’s decision would have likely been different.

“(It) demonstrated to NICC that not only was The Star aware of the gravity of the findings of the Bell review, but that The Star would work transparently with the regulator in remediating its operations,” he said.

“Had The Star not published this letter, it very likely that there would be a different outcome announced here today.”

Mr Perrottet called The Star “absolutely horrendous” following the report’s release.

“There is no place for anybody in any organisation, particularly casinos, to not be complying with the regulations in place,” he said days after it was handed down.

NSW Hospitality and Racing Minister Kevin Anderson said in a statement at the time the findings in the Bell report were “shocking”.

“Their lack of respect for compliance and regulation is breathtaking,” he said.