Bell launches broadside at lack of cultural change at Star

Casino inquiry boss Adam Bell SC has slammed the slow progress of Star Entertainment to clean up its act, contrasting it to successful reform efforts at rival Crown Resorts.

The Star’s reform efforts are under fire.

Casino inquiry boss Adam Bell SC has launched a broadside at the slow progress of Star Entertainment to clean up its act, contrasting it to reform efforts at rival Crown Resorts.

Mr Bell told the Bell II hearing Wednesday that he had been assured by Star after his first inquiry in 2022 that reform efforts would take two years.

But he was now being told by witnesses including organisational expert Elizabeth Arzadon it could take up to five years. Mr Bell is due to report to the NSW Independent Casino Commission (NICC) by July 31 on whether Star is suitable to retain its Sydney licence after earlier findings of breaches of money laundering rules and other misconduct.

“Why the stark contrast between Star and Crown, which regained its Melbourne casino licence in two years?” Mr Bell asked. “Why am I now being told 20 months later that Star is at the beginning of cultural change.”

Mr Bell’s second inquiry, now in its third week, has heard a litany of continuing problems at Star including fraud, falsification of gambling welfare checks and a warlike attitude to regulator and its appointed manager Nicholas Weeks.

Business ethics expert Attracta Lagan, who has been a consultant to both Star and Crown, told Mr Bell that Crown had a chief executive who was a “champion” of cultural change and had invested heavily in reform efforts. By contrast, Star had not given priority to cultural reform.

Dr Langan said there was a realisation at Crown that gambling was becoming a public health issue and the “old Crown was not longer fit for purpose.” The Victorian Gambling and Casino Control Commission in March decided Crown could keep its licence and was satisfied the systemic failings of Crown Melbourne were a thing of the past.

Like Star it was given two years to reform the business to prove it remained suitable to continue to hold the licence.

Crown’s remediation efforts have been praised.

Ms Arzadon, the managing director of Kiel Advisory Group, said necessary change at Star could take up to five years, amid a continuing negative attitude within Star toward the regulator. She said former chief executive Robbie Cooke was convinced that the NICC was biased against the company and certain members of his executive team.

“Mr Cooke was open about his belief that there was bias from the regulator that would be difficult to overcome,” Ms Arzadon said.

“One of the differences was his belief that the regulator wanted certain members of the executive team to be removed. Mr Cooke disagreed with that, and it became an immovable difference.” Ms Arzadon told the inquiry that the troubled casino group was barely six months into what could be a five-year journey of cultural reform.

She added Mr Cooke also was in conflict with some members of his board who believed some executives also should be removed.

This fed a widespread belief within Star that an “outside force” was attempting to enforce changes at Star. “At the senior level there was this combative relationship with the regulator and that tone was set by people like Mr Cooke”.

Ms Arzadon said that after the departure of Mr Cooke in March, then executive chairman David Foster had reached out to the regulators to better understand their views.

“They are at the beginning of the journey and there is broad agreement about the need for cultural change,” she said “Star is conscious of the need for more competence in cultural reforms, but there is still a very long way to go.”

Star has denied allegations aired earlier in the inquiry that one of its executives pressured a colleague to cook the books in relation to a $3.2m cash machine fraud.

The inquiry heard in its first week of sittings, that Star’s head of investor relations Giovanni Rizzo had suggested to former chief financial officer Christina Katsibouba that she delay the booking of losses related to the fraud from July to November 2023 to make the company’s trading position look stronger than it was.

She said she declined to follow the advice and booked the losses in July as was appropriate.

Counsel assisting the inquiry Caspar Conde told the inquiry on Wednesday Mr Rizzo had now provided a statement denying the allegations and any impropriety.

Mr Conde said Star informed the NSW Casino Commission (NICC) it had investigated the allegations. “Given those statements I can foreshadow that I will be not be making any submission to the inquiry that will require to you make a finding in relation to the account of either Mr Rizzo or Katsibouba,” said Mr Conde.