Star’s 14 days in the last chance saloon

Has Star Entertainment really done enough to align itself with the regulator and keep its precious Sydney casino licence? Place your bets, folks.

On September 13, NICC commissioner Philip Crawford shared his excoriating opinion of the company, giving board and management a fortnight to show why he should not cancel or suspend the Sydney licence for The Star. He demanded fresh eyes and hinted heavily that interim chief executive Geoff Hogg had to go.

The response to regulator was lodged on Monday night. The most sensible decision Star made is to lean on Scott Wharton to drive it.

Wharton joined the business two months ago from the Commonwealth Bank, where he led the bank’s response on how it would fix its broken culture and compliance after APRA’s damning inquiry.

Wharton is now the CEO of Star Sydney where its casino licence remains at the pleasure of Crawford and he runs transformation across the group. About the only nice thing the Commissioner had to say about Star was a reference to Wharton.

Known as a stickler for detail, Wharton has produced a plan for 130 milestones running over the next two years to make the business fit for purpose.

The NSW Independent Casino Commission’s Philip Crawford. Picture: Nikki Short

Crawford should expect nothing less. But he will also weigh up evidence that Star listened to his demand for a new urgency he saw lacking: that too many people still associated with the poor culture of the past remain; that arrogance was still palpable; and that the Gotterson review into Star’s two Queensland casinos is underway.

Crawford must be confident that in all the change at the top, Star is still competent operationally.

On Monday Star’s interim Group CEO, Geoff Hogg, resigned. This was a no-brainer as Crawford had named and shamed him for being CEO of the Queensland operations while a gambler banned from Sydney had been free to gamble in Queensland.

In recent days four other senior executives have also resigned, taking the total number to almost 20 such departures.

There is still an agonising wait for new chief executive, Robbie Cooke, to move over from Tyro. He ran Tatts, Wotif and the tech and regulatory heavy Tyro and has kept his nose clean.

Tyro has announced his replacement, but so far Cooke is staying as an adviser until year end.

Do not rule out an earlier transfer for Cooke. Behind closed doors, no doubt every effort is being made to speed up the process and let the regulator know Cooke will be in place ASAP.

The Star Sydney chief executive Scott Wharton. Picture: John Appleyard

In the meantime with Hogg gone, Star chairman Ben Heap has had to leap in as executive chair. Wharton says Heap’s hands-on contribution in the last eight weeks allowed him to focus on Sydney.

“I’m confident that whether Robbie starts next week or later in the year that Ben, in consultation with Robbie in the background, myself and others here will do a great job in that executive chair seat and mitigate any risk of Robbie physically not being here yet,” he says.

Thankfully management has stopped talking about “renewal” at Star and now talks “remediation”. Renewal means resuming the same thing after an interruption! Star has accepted all the findings of the damning Bell report and signalled cultural reform ahead.

Wharton also closed The Star’s Marquee nightclub. “There were a large number of incidents around the nightclub and I thought it was an important step to take,” he says.

Star has put in place an interim chief risk officer and announced that Scott Saunders, general manager of financial crime and chief compliance officer at Westpac, will take on the job from February.

And the company has contracted PwC and Deloitte to increase its headcount by 53 – fresh eyes in safer gambling, financial crime, risk and compliance – taking the number of staff working in financial crime to 56. A new independent monitor, lawyers Allen and Overy will report quarterly and publicly – whether good, bad or ugly.

Star Entertainment interim chief executive Geoff Hogg has resigned. Picture: Liam Kidston

So will all this be enough to persuade Philip Crawford to change his mind, given Adam Bell’s findings which shocked the public and politicians alike?

Two other factors may weigh on his decision.

The first is the Gotterson inquiry in Queensland. Gotterson is waiting on Crawford’s opinion and not the other way around. But it would also be open to Crawford to punish Star by removing at least its tables gaming licence until Gotterson concluded with nothing else coming out of the woodwork.

“Obviously we would respect the decision if they made it,” says Wharton, who again stresses the urgent steps The Star has taken in resourcing on security, compliance and safer gambling.

The second factor is how much weight Crawford gives to the public interest argument that a loss of licence threatens jobs and damages remediation.

“I would hope this is something he would balance here carefully,” says Wharton.

“Allowing companies to keep moving is important, otherwise they can get into a tailspin and never get there to remediate. And this potentially impacts on employment – not just here but across the whole Group.”

The timing of Philip Crawford’s final decision is unclear.