Star ‘not fit’ to hold casino licence, chair tells inquiry

Star Entertainment executive chair David Foster says the company is not currently in a fit state to hold a casino licence and may need further supervision by the regulator.

David Foster appearing at the 2024 Independent Inquiry into The Star.

Star Entertainment executive chair David Foster says the company is not currently in a fit state to hold a casino licence and may need further supervision by the regulator.

Mr Foster told the Bell inquiry II that despite improvements in its remediation efforts, Star would need further assistance to meet required regulatory standards.

“Obviously some safeguards may be needed for the (NSW Independent Casino) Commission to make sure that we keep focused and don’t slip on delivering a plan we have refined,” Mr Foster told the inquiry. That could include an extension of the current manager Nicholas Weeks’ term in office due to end September.

Earlier the inquiry was told of deteriorating relations between Star and the regulator, which was pushing for a greater pace of reform at the troubled casino group.

Mr Foster admitted he was “trigger happy” in a string of messages to former chief executive Robbie Cooke that claimed the regulator was “prepping for war” and should be abolished.

Mr Foster said the text messages to Mr Cooke were made in the “heat of the moment” and denied a suggestion they were contrary to public statements that Star was being open and transparent with the NICC.

The inquiry heard Mr Cooke hoped for something “explosive” on NICC chief commissioner Philip Crawford amid rising friction with the regulator. The statement made in a text exchange between Mr Cooke and Mr Foster in December came after the NICC said it had lost faith in Mr Cooke’s ability to execute Star’s remediation policy.

According to messages shown to the inquiry, Mr Foster discussed the situation at Star with a family friend called John, who had knowledge of the casino sector, who told him he “thought Crawford was motivated to rewrite history”. When Mr Cooke was informed about the exchange, he said: “I was hoping for something explosive. Shame.”

Former Star Entertainment chief executive Robbie Cooke.

“I admit some of my messages were trigger happy and that in hindsight I should have put the phone down and chosen my words better,” Mr Foster told the inquiry on Tuesday.

Star was under intense pressure to prove to the NICC that it was suitable to keep its Sydney casino licence despite the first Bell inquiry that revealed shortcomings in its anti-money laundering policies, concerns over criminal affiliation and fraud.

Mr Foster said Star should have taken a more conciliatory tone with regulators who were calling for a better performance from the company in relation to remediation.

“It was obviously a very tense period with a number of media announcements regarding the possible closure of the Sydney property,” he said.

Mr Foster said while he told Mr Cooke he wanted to abolish the NICC, it reflected a “heat of the moment” view and was in the context that there was a need for a single regulator to cover both clubs and hotels to create a “level playing” field.

Mr Foster said the company’s senior executives including Mr Cooke had fallen short of regulator’s expectations. He said issues such as a $3.2m cash machine fraud committed against Star, the falsifying of welfare checks on customers and the absence of senior leadership in Sydney reflected a lack of maturity within Star.

He also conceded the company’s lagging remediation efforts meant it could not currently be considered suitable to retain its casino licence in Sydney and may need further supervision by the regulator and the special manager.

Star chairman David Foster admits he was “trigger happy” in messages.

He added the NICC had by December lost faith in Mr Cooke’s ability to execute the remediation plan and Star’s board had asked about possible replacements at short notice. Mr Foster denied this meant the board was trying to get rid of Mr Cooke.

Following his resignation as CEO last month, Mr Cooke agreed to stay on a consultant in a transition role. But Mr Foster revealed to the inquiry that Mr Cooke’s consultancy agreement was terminated on April 18 following the start of the Bell Inquiry II.

Mr Foster was asked by counsel assisting the inquiry Caspar Conde whether the termination was because Star believed Mr Cooke had given incorrect answers to the regulator and the inquiry about the resignation of chief legal officer Betty Ivanoff.

Mr Foster said “he did not personally have a view on that” but Mr Cooke’s continued role with Star was “becoming complex with some of the comments made at the inquiry”.

Ms Ivanoff told the inquiry last week that there was a dispute with Mr Cooke about the date she officially handed in her resignation.

Mr Conde said Star had attempted to spin a false narrative of an executive “cleanout” after telling the NICC the board had terminated the employment of Mr Cooke and chief financial officer Christina Katsibouba. Mr Conde said in fact both executives had initiated their own departures.

Mr Foster admitted he got the “terminology” wrong when describing Ms Katsibouba’s departure as a termination when she had in fact submitted a resignation letter. He stood by the claim that the company initiated Mr Cooke’s exit.

Rolling the dice on Star’s future.

“There were a lot of movements of people at the time,” Mr Foster told the inquiry.

Mr Foster said the board did not want Mr Cooke to email an exit statement to staff that appeared to assign blame for his predicament to Mr Crawford.

In the statement. Mr Cooke said Mr Crawford did not consider “I was moving with sufficient speed with the reforms and changes being implemented at The Star – a view with which I respectfully and fundamentally disagree”.

Mr Foster said the board reviewed and gave feedback on the statement because “we were uncomfortable with it but we certainly didn’t approve it”.

Mr Conde asked why Mr Cooke, who was still an employee, was instructed not to send the email. “Possibly (we could have),” Mr Foster replied.

Former group transformation officer Nicola Burke said there had been a definite improvement in culture at the troubled casino operator since the first Bell inquiry.

That included a shift in risk culture and compliance including the separation of the legal team from the risk team, conflict of interest training and a refreshed whistleblower hotline.

She said Mr Cooke was a “friendly leader” with an open door policy.