Former Australian Rugby Union chief John O’Neill takes charge of The Star

Star chairman John O’Neill is betting on containing revelations at the NSW inquiry. Any such inquiry in Queensland would be potentially more harmful to Star.

Star chairman John O’Neill in 2020 with an image of the Queen’s Wharf project now being constructed in Brisbane. Picture: AAP

Star chairman John O’Neill, the former chief executive of Australian Rugby Union, is betting on entering the scrum and making quick decisions to contain damning revelations at a royal commission-style inquiry in NSW.

While Crown Resorts former chief executive Ken Barton waited until the NSW Bergin inquiry released its report early last year to resign – and then even resisted calls to do so – Star’s chief executive Matt Bekier fell on his sword this week, midway through a similar high stakes probe.

Star had little choice.

Although its corporate office is at Pyrmont, it is in Queensland where the bulk of its revenue now comes from, with that proportion to continue to grow as $5bn worth of developments in Brisbane and the Gold Coast are completed.

An inquiry in Queensland would be potentially more harmful to Star than the NSW review, which has so far heard a series of explosive allegations, including the company disguised almost $1bn in gambling transactions as hotel charges and moved a Chinese junket operator – with “demonstrated links” to triad criminal gangs – to a secret gaming salon.

Queensland Attorney-General Shannon Fentiman says the state government will “carefully consider the allegations made in relation to Star”.

A spokesman for the state’s gaming regulator added: “The government will use the recommendations of interstate inquiries and Austrac investigations to consider enhancements to Queensland’s … regulatory framework”.

“Allegations of organised crime infiltration and money laundering activities are taken very seriously,” he said.

If a separate Queensland inquiry transpired, it would potentially also be embarrassing personally for O’Neill, who has a close relationship with Premier Annastacia Palaszczuk and played a key role in helping secure the 2032 Olympics for Brisbane.

In May 2019, on the top floor of the Darling at The Star on the Gold Coast, O’Neill hosted a high-powered gathering that brought Palaszczuk and Inter­national Olympic Committee president Thomas Bach into the same room for the first time.

“The night worked out terrifically, everyone got on well with fine food and fine wine,” O’Neill later told Brisbane’s 4BC.

In return, O’Neill has been thought to be one of those under consideration to oversee the Brisbane Olympics as chairman or at least sit on the committee in the run up to the 2032 games, by which time he will be 81.

By taking decisive and early action at Star – which includes board renewal, although it’s not yet known which directors will leave – O’Neill will be hoping to maintain Star’s suitability to run its casino empire. O’Neill has also been able to turn businesses around. In the late 1990s and early 2000s, he had stunning success at Australian Rugby Union.

Following the 2003 Rugby World Cup – which was held in Australia – Frank Lowy pried him away from the sport to run soccer in Australia, which had been hamstrung by inept administration. He reversed soccer’s flagging fortunes with Lowy but couldn’t find the same success when he returned to rugby in 2007. Soon after, having ascended Star’s chairmanship in 2012, he revived the company, then known as Echo Entertainment, with Bekier after it was routed by Crown in the political battle over the new licence and then a series of scandals.

The pair set about transforming Star Sydney, from being known as the “Pyrmont RSL” to a premier hotel and gaming complex, which attracted the Australian premier of Broadway musical Hamilton. O’Neill finds himself in a similar position to when he returned to rugby, as Star finds itself embroiled in a fresh crisis.

Investors are angry. Some have joined a class action – proceedings that Star says it will defend. Others are saying how could Star have denied allegations that it was no better than Crown, when the Bell inquiry has heard that its own house is far from being in order when it comes to combating money laundering and organised crime.

The Bell inquiry heard that in 2018, Bekier dismissed an independent report from KPMG that exposed “fundamental deficiencies” in Star’s anti-money laundering and counter-terrorism financing practices at a “hostile meeting”. Those close to Bekier say his annoyance stemmed from being “blindsided” by the KPMG report, which went straight to the company’s audit committee, and the fact that it contradicted previous reviews – one even by the financial crimes regulator, Austac.

But Star’s former chief risk officer, Paul McWilliams, told the inquiry the “internal audit is meant to have an independent line of reporting directly to the audit committee”. “It is meant to be able to report on a without fear or favour basis and without interference from management otherwise it loses its independence and effectiveness.”

The inquiry then saw CCTV footage that showed bundles of cash being taken from backpacks and exchanged for gambling chips at Suncity’s exclusive gaming salon at Star’s Pyrmont casino – what Bell described as “running a casino within a casino”, contrary to state laws.

The inquiry also heard that Star believed Suncity boss Alvin Chau was of good repute until as late as 2021, dismissing a Hong Kong Jockey Club report that revealed his links to criminal gangs.

While O’Neill has now stepped into the role as Star’s executive chairman – adopting the same move that Crown’s former chairwoman Helen Coonan took when Ken Barton resigned last year – there are differences between the two companies.

The Bergin inquiry began when Crown’s dominant shareholder James Packer decided to sell a 19.99 per cent stake in the company to Macau billionaire Lawrence Ho. Star has a diverse shareholder base with no dominant shareholder and the Bell inquiry is part of the NSW’s gaming regulator’s regular five-year review into Star’s casino licence.

The revelations from the Bergin inquiry sparked royal commissions into Crown in Victoria and Western Australia, casting a spotlight on Star’s operations.

And after Coonan assumed the role of executive chairman at Crown – after being named by Bergin as the only one who could turn the casino group around – she left the company earlier than expected after the Victorian royal commission was less glowing.

While commissioner Ray Finkelstein did not offer an opinion on Ms Coonan, who resigned last August, counsel assisting recommended a finding of unsuitability over the alleged failure to act on the many deficiencies of Crown as a director – a position she had held since 2011.

For O’Neill, after helming Star for almost 10 years, time will tell if it will befall a similar fate or if he will succeed in getting the company’s renewal over the line.