‘Leaderless’ Star Entertainment target of criminals, inquiry hears

The casino group remains leaderless and susceptible to criminal exploitation as it lags behind in remediation efforts and cultural reforms, an inquiry has been told.

Star’s Queen's Wharf precinct in Brisbane. Picture: Supplied

Casino group Star Entertainment was leaderless and susceptible to criminal exploitation as it lagged more than a year behind in remediation efforts, the Bell II inquiry has heard.

Counsel assisting the inquiry Caspar Conde said a $3.2m fraud committed against Star last year involving malfunctioning cash machines showed the company was still vulnerable to criminal activities as the ranks of its senior executive team remained depleted.

Mr Conde in closing oral submissions said the fraud, which allowed winning gambling tickets to be reused in “ticket in, cash out” machines, was committed by 18 people who undertook 1800 fraudulent transactions.

The inquiry, the second by Adam Bell SC into whether Star is suitable to retain its Sydney casino licence, heard the fraud was a failure of internal controls at the company.

“The sort of criminals who can put together a racket of that kind in a short space of time, conduct 1800 transactions and extract $3.2m, they’re just not the sort of people who should be anywhere near the casino,” Mr Conde said. “And they do present a risk to members of the public. So there is a risk beyond just money being lost by the Star and then you have the related risk of those criminals influencing things at the casino.”

Mr Conde said staff who had visibility over respective business units failed to appropriately escalate, investigate and raise the errors in the operation of the ticketing machines.

“It’s almost a cliche that casinos would, or should be, very good at keeping track of money that’s leaving the casino, but here for a period of about a month and a half a group going up to the ticketing cash-out machine and walking away with $3.2m,” Mr Conde said.

He said it may not be possible to decide a time when Star Entertainment would be suitable to retain its Sydney casino licence, as he summarised evidence from former executives and board members that pointed to continuing regulatory missteps.

The Star’s Queen's Wharf Brisbane precinct. Picture: Supplied

Mr Conde referred to a “lost 14 months” in the company’s reform efforts between Mr Bell’s first inquiry in 2022 and his current inquiry. The first inquiry resulted in the installation of a special manager to run Star’s casinos in both Sydney and Queensland after Mr Bell found breaches of money laundering rules and other misconduct.

Mr Conde said Star had since then failed to accelerate a changed culture at the troubled casino group, with delays in appointing a chief executive of its Sydney casino who could have more closely supervised operations.

An earlier witness in the inquiry Dr Attracta Lagan, who was brought in as a business ethics consultant for Star, had flagged to the board and CEO since early 2023 the need for an organisational development specialist to shape cultural change.

“This is an early manifestation of what I’ll call the lost 14 months and I say that because it’s been more than 20 months since your report of August 2022,” Mr Conde told the inquiry. “There’s evidence of Star being about six months in on its transformation journey of three or up to five years, but they’re not 20 months down that journey.”

Star Entertainment was “leaderless and depleted” as it faced growing regulatory and financial challenges, the inquiry heard.

Mr Conde said that the troubled casino group needed a new chief executive, chief customer officer, chief legal officer and chief transformation officer among others to rebuild its depleted leadership team after a string of resignations in recent months.

Mr Conde said Star had operated under a series of “shadow values” that were contrary to its stated values. He said they could be summarised as “profit matters most”, “play politics to stay alive”, “just get it done” and “do more with less”. Former chief executive Robbie Cooke and former chair David Foster had embedded a culture of ‘us versus them’ in regard to regulators.

Mr Conde said the falsifying of welfare checks on gamblers playing for more than three hours had been blamed on a lack of staff resources.

Former Star Entertainment Group chief executive Robbie Cooke.

“These checks force people who on any view have been gambling for a long period of time to potentially snap out of some sort of zone that they might be in, pause and take a break,” said Mr Conde. “They need someone to come and intervene. If they’re a problem gambler, the damage can be enormous for them and their families.

“Not only was that not happening here, which is obviously bad enough, but there were people lying about it to create records suggesting that there had been an intervention.

“There was a lot of evidence to the inquiry about guest support officers saying they just didn’t have the resources. Of course there is no excuse for falsifying records, but it may go some way to explain the workarounds being deployed by them.”