Austrac widens money laundering probe at Star Entertainment beyond Sydney

The financial crimes watchdog will look beyond Star Entertainment Group’s Sydney operations for potential money- laundering breaches.

The Star Casino in Sydney was the early focus of Austrac’s investigation. Picture: Brendon Thorne / Bloomberg

The nation’s anti-money-laundering agency has expanded its investigation into Star Entertainment – widening inquiries from the company’s Sydney casino to its Queensland operations.

The investigation, which began in June, would now include “multiple entities within the Star group”, an Austrac spokesman said.

Star has gaming operations in Sydney, Brisbane and the Gold Coast. Austrac said it was also working with state regulators to monitor the “significant risks” of money laundering at casinos.

Austrac is investigating potential breaches of anti-money-laundering laws from 2016 to 2019, but had previously confined its inquiries to the Star Sydney.

Sources close to the inquiry said Star Entertainment had a single anti-money-laundering program across all its casinos. In an ASX statement, Star said it had been advised by Austrac that the agency had “not made a decision regarding the … response that it may apply” including if any enforcement action would occur.

“The Star takes its anti-money-laundering obligations very seriously and will fully co-operate with Austrac in relation to its requests for information and documents and the investigation,” the company said.

The Queensland Office of Liquor and Gaming Regulation said it was also working with Austrac as it continued its inquiries.

Star Entertainment Group, led by CEO Matt Bekier, seen above at Brisbane’s Treasury Casino, will “fully co-operate” with Austrac. Picture: Richard Walker

In September, the NSW Independent Liquor & Gaming Authority said it had appointed Adam Bell SC to undertake a review of Star’s Sydney operations.

Mr Bell was the lead senior counsel assisting a similar inquiry into Star’s rival, Crown Resorts, which ultimately led NSW regulators to refuse to hand the James Packer-backed firm its gaming licence for its casino in Barangaroo.

In February last year, former NSW Supreme Court judge Patricia Bergin found Crown was unfit to hold a casino licence and recommended Mr Packer be forced to sell down his 37 per cent stake in the company.

The ILGA review of Star is ­expected to hold public hearings starting in March and conclude its inquiries by June. According to its terms of reference, Mr Bell will consider whether Star and its close associates are of good repute, whether it is operating within the law and whether the company is being administered to “ensure that the management and operation of the casino remains free from criminal influence or exploitation”.

Star shares closed 1.9 per cent, or 7c, lower on Friday at $3.54.

Despite the NSW regulatory action against Crown – and separate royal commissions into its operations in Victoria and Western Australia – private equity group Blackstone on Thursday made an $8.9bn bid for the company.

The Crown board says that if a binding proposal is made – following the completion of regulatory checks on Blackstone – it will recommend the offer be accepted.

Some equities analysts suggest Star may still bid for its rival – the company had previously lobbed a $12bn merger proposal. However, the threat of expanded regulatory action may make that more difficult for the company.

“We maintain our view that Star is a reasonable prospect of ­renewing its nil-premium merger proposal for Crown,” wrote Evans & Partners analyst Sacha Krien.

“Star’s share price weakness may persist until there is greater clarity on the outcome of the Bell review in NSW,” he told clients.

“It’s unclear whether Star will be able to wait that long, given limited transparency on how progressed Blackstone’s applications for regulatory approvals are.

“It’s also possible other bidders for Crown emerge, although we believe this will be difficult given what’s likely to be a very high threshold for probity approval in Australia.”