The Star accused of falsifying welfare checks as gamblers took $3.2 million from company

The Star Entertainment Group’s special manager has alleged the company falsified required welfare checks on pokies players and accidentally allowed customers to take $3.2 million they had not won from its machines.

In opening evidence at the NSW inquiry into The Star’s culture, Nicholas Weeks also accused executives of plotting to sue him.

Star Sydney’s special manager, Nick Weeks, at the regulator’s inquiry in Sydney on Monday.

Weeks was appointed to The Star by the NSW Independent Casino Commission on the day it was stripped of its casino licence in October 2022 for what was supposed to be a three-month period. His term has since been extended three times on the request of the regulator, which remains unconvinced the company has committed to cultural renewal.

Adam Bell, SC, has been engaged by the regulator to assess how the company has progressed in the two years since his first inquiry.

The Pyrmont business could be shut down if it does not regain its licence, which would end the employment of 3000 people and cut billions of dollars in tax contributions from the state government’s bottom line.

Weeks – who has held the company’s casino licence since it was disgraced in 2022 – said he believed the business’s recently departed boss, Robbie Cooke, had worked hard but ultimately failed to juggle the requirements of keeping the business afloat with the demands of remediation.

He said he was surprised by text message exchanges between the company’s executive chair, David Foster, and Cooke, which referred to plans to oust him from the company, including a proposal to concoct a shareholder-led class action against him and the regulator. Weeks said the exchanges exemplified his view the company was focused on the wrong things.

“I find it extraordinary that the chairman of a listed company and its chief executive would exchange messages contemplating a class action against me personally and the regulator in circumstances where their public position with me is that they’re working co-operatively to address deficiencies that they need to address,” Weeks said.

Weeks revealed Star Sydney had failed to fix a broken “ticket in, cash out” machine that allowed customers to take $3.2 million in cash they had not earned from the casino over a six-week period in June last year.

He said this event was of particular concern given it was not addressed by the company until July 24, and he had expected that an ASX-listed casino business would have strict oversight of its financial position at all times. Instead, it failed to fix the machine for almost two months, which meant customers were able to keep reusing their tickets in exchange for more money.

Former Star Entertainment boss Robbie Cooke.Credit: Louie Douvis

“This incident identified deep cultural problems in relation to the level of rigour through which controls are followed and the level of care in which work is conducted... I was also concerned about the control environment because I anticipated that balancing the books and counting money was something I anticipated the casino would be very good at,” Weeks said.

Weeks also told the Bell inquiry that officers from Liquor and Gaming NSW revealed Star Sydney had observed Star Sydney’s failure to comply with its requirement to complete welfare checks on customers who had continually played on its poker machines for longer than three hours.

When Weeks conferred with the company’s compliance log, it became apparent that the relevant Star Sydney customer support officers had falsified the document to indicate the check had been completed.

Weeks said it quickly became apparent that this event was not a one-off but widespread across the Sydney premises and had since prompted an investigation into its Queensland precincts in Brisbane and the Gold Coast dubbed Operation Falskur (icelandic for “false”).

Weeks said he was most concerned that the breaches were raised only by Liquor and Gaming inspectors and not any staff within the company itself, despite the scale of the breaches.

Weeks also said he believed the company had unduly accessed his emails and calendar without his consent based on correspondence between Foster to Cooke which referred to information that they could not otherwise have had access to.

Foster wrote to Cooke on January 31: “They are prepping for war, we better do the same”, ahead of a meeting with the regulator that Weeks said they could not have known about without accessing his diary.

Weeks said he was surprised by the tone of the exchanges, given both executives had engaged normally with him in person, and he was concerned the company had allegedly been monitoring his diary.

“To suggest they wanted to go ‘to war’ with me and the regulator in a circumstance where their licences are suspended and there’s a decision about that suspension already scheduled to occur in June… is extraordinary,” Weeks said.

Weeks’ evidence will be followed by a number of senior and former executives over the next three weeks. Bell will then be charged with determining whether the group is suitable to operate on the basis of these testimonies.

The ASX-listed businesses share price closed at an all-time low of 48¢ on Monday, indicating the market expects a gruelling month ahead for the struggling casino group.

The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.