Secrets exposed: Star casino audit slammed as ‘selective, incomplete’

The confidential report was the spark that set off a chain of events for the casino, leading to a near fatal clash with NSW casino regulator.

The explosive report at the centre of Star Entertainment’s battle with the NSW regulator was slammed by the casino’s board for lacking balance, being riddled with errors as well as being “selective” and “incomplete”.

The highly confidential report written by Star’s controversial independent manager Nick Weeks, completed last October, became the spark that set off a chain of events for the casino, leading to a near fatal clash with the NSW Independent Casino Commissioner Philip Crawford.

The Australian has seen a copy of the 67-page Weeks assessment over whether Star should be considered suitable to hold a casino licence in the state.

The final report includes responses from Star.

Former chief executive of The Star, Robbie Cooke. Picture: David Clark

As part of its conclusions, the report into Star urges the NICC and Queensland’s regulator to keep Mr Weeks on, in the $1.8m-a-year role as manager of the casino in Sydney and special manager of the Brisbane and Gold Coast property, saying “continued oversight, scrutiny, guidance and reporting to casino regulators is required”.

But after being given a copy of the report nearly two months later, it was met with a forensic rebuttal by then chief executive Robbie Cooke and signed off by the Star board, as it reveals tensions between regulator and casino ran high.

Until now the report has remained under wraps, with even key NSW government members yet to see the contents as well as the concerns raised by The Star in how the assessment was made.

The Australian has also seen a confidential letter dated February 1 where the regulator cut off communication with The Star as it took issue with Mr Cooke. Mr Crawford then refused approaches from Star to discuss the report and find a solution to the impasse.

“The fact that you co-signed with Mr Cooke (in) The Star’s response of 23 January 2024, aligns you as chairman and your board with the contents of that document,” Crawford’s letter sent to Star’s board and then-chairman David Foster says.

“You have made your position clear,” according to a letter sent to Star’s board and Mr Weeks. “In those circumstances, we are of the view that further meetings with you are not required at this time.”

Just two weeks later Mr Crawford’s NICC shocked Star, the NSW government, the Queensland government, as well as investors by launching another full-blown inquiry into the casino.

Mr Cooke resigned shortly after, saying it was in the best interests of the company. Former Crown chief executive Steve McCann this month has taken charge as CEO.

The original Weeks report dated October 3 took aim at a number of areas of Star’s reform efforts under Mr Cooke, who had joined Star a year earlier, covering governance, leadership, capability and organisational structure.

It says the rebuild of executive ranks was “progressing slowly and is unfinished” while accusing the casino operator of deferring work on rebuilding its governance “in favour of alternative priorities”.

The Weeks report said The Star did not appear to have “an appreciation for the gravity of the conduct” highlighted an earlier state-sponsored inquiry, which found international junket trade had exposed it to possible money laundering and links with criminals.

Weeks too raised concerns about Star’s decision to retain a number of executives alongside new recruits, even though there were no findings or suggestion they were involved in previous misconduct.

NSW Independent Casino Commissioner Philip Crawford. Picture: Jane Dempster

But an incensed Mr Cooke and Star board said the casino was forced to respond to the Weeks report as it was fearful the NICC’s or Queensland’s decisions around the fate of its casino licence would not be made “on the basis of complete and accurate facts, taking into account all relevant matters”.

Star also took the opportunity to hit out at the NICC’s refusal to endorse a critical remediation plan “for reasons that are not apparent”, which had been preventing the casino’s new management team’s ability to push ahead with an overhaul of the culture.

Indeed, the Weeks report called out the lack of the same remediation plan, as representing a “material execution risk” to Star’s recovery. But Star said it was perplexed the NICC hadn’t endorsed the remediation plan after submitting it and working collaboratively for months with Weeks on the document.

Star says the Weeks report turns a blind eye to nearly 50 major safer gaming reforms the casino’s management had introduced within 12 months, including building a new leadership, a new financial crimes unit, facial recognition technology, hi-tech safe gaming technology, as well as a rebuild of all risk functions and new whistleblower and staff reporting channels.

Star noted dozens of the same or similar measures were called out as significant reform steps achieved by rival casino operator Crown Resorts by the Victorian regulator and independent manager as that casino was undergoing its own path to win its licence back in the state.

Through 2022 and 2023 Star faced blows such as legal action from the financial crimes regulator Austrac; it was slapped with a higher casino tax, and undertook two capital raisings needed to sure-up its financial survival. Star said it “strongly disagreed” with the assertion that it took the eye off the ball on reform.

A second full-scale inquiry into Star ordered by the NICC ultimately led to another clean-out of the board.

The Bell Two inquiry was overseen by Adam Bell, the same senior counsel who presided over the initial inquiry into Star in early 2022. Mr Bell is scheduled to deliver his recommendations to the NICC this week.