Inside Star’s game of poker with NSW’s new premier Chris Minns

If Star is doing its best poker face, it offers little comfort to the 500 people who will lose their jobs at the troubled gaming group.

Star has been at pains to highlight to the NSW government that it is struggling to keep the lights on across its three city casino empire.

The NSW government has proposed lifting the state’s casino tax rate - a hangover from former Treasurer Matt Kean. The thinking at Star is simple: how can you hike taxes when the company is going broke?

First, Star announced a write down of almost $1bn on its flagship Pyrmont casino in February - laying the blame squarely at the NSW government’s tax reform.

On Wednesday, it followed with another shot, saying it would sack 500 people - mainly in Sydney - as part of a $100m cost cutting program in the wake of a “rapid deterioration” across its operations.

Star said the cost cutting had nothing to do with the NSW government’s proposed tax hike. After all, it was a trading update on this financial year’s earnings and if the tax increase proceeds it won’t take effect until FY24 at the earliest.

Star chief executive Robbie Cooke. Picture: Steve Pohlner.

Still it is difficult to separate the two: lifting taxes would cost further jobs and effectively send tumbleweeds rolling through Star’s harbourside Sydney casino - already colloquially known as the Pyrmont RSL.

The problem for Star is hardly anyone will be crying over the gaming group’s financial woes, particularly after last year’s explosive inquiries headed by Adam Bell SC in NSW and Robert Gotterson, a former court of appeal judge, in Queensland.

Star was caught out behaving badly. According to the financial crimes regulator, Star allowed accused sex slave traders, a murderer for hire, loan sharks and drug traffickers to gamble billions of dollars at its casinos for years, despite details of their crimes being publicly available

Above the rows of its brightly-lit poker machines, and zing and pop of their electronic noises at The Star, Austrac painted a sinister world. In its exclusive gaming rooms the company asked little to no questions about the source of wealth of its high-rollers, resulting in “innumerable” and systemic breaches of anti-money laundering and counter-terrorism financing laws.

Then it continued to deal with Alvin Chau - the now imprisoned former Macau junket king - whose Suncity operation illegally ran “casino within a casino” at Star Sydney, flouting money laundering laws. What’s more, Star executives knew about it, and did nothing. In fact, they moved Chau’s operation into a secret room at Pyrmont.

It is this behaviour that led NSW and Queensland gaming regulators each fining Star $100m and Austrac pursuing the company for potentially hundreds of millions of dollars more in penalties.

And Star - or at least the 20 senior executives that have left the company in the past year - only has itself to blame.

Star’s shareholders say they are the ones who are being punished, with the company’s share price more than halving to $1.26 in the past year - the lowest level since it was spun out of Tabcorp a decade ago.

New chief executive Robbie Cooke has been desperate to make amends and repair the company’s relationship with regulators.

NSW premier Chris Minns has inherited a $7bn budget hole. Picture: NCA NewsWire/Simon Bullard.

But the reality is, NSW’s new Premier Chris Minns has very little to lose in going hard on Star and sticking to Kean’s proposed casino tax hike.

Minns also has his own problems. The NSW budget has been delayed until September after new Treasurer Daniel Mookhey discovered a $7bn hole.

Among the pressures are an unfunded program responsible for the jobs of more than 1000 nurses and funding shortfalls for cybersecurity and Out of Home care for children. Juxtapose that with lifting taxes on a bad behaving casino and the choice seems easy.

Yet, the NSW gaming regulator effectively judged Star as being too big to fail when it suspended its casino licence but allowed its Pyrmont resort to continue to trade - namely to protect jobs.