Toxic: Whistleblower complained about former casino boss

Star Entertainment received a whistleblower complaint about former CEO Robbie Cooke and the gaming company’s ‘toxic culture’, an inquiry has heard.

Former Star boss Robbie Cooke.

Star Entertainment Group received a whistleblower complaint about former chief executive Robbie Cooke and the company’s “toxic culture”, the second Bell inquiry into the troubled casino operator has been told.

Details of the nature of the complaint made in February were not revealed at the inquiry on Tuesday, with the issue referred to an external law firm for further investigation.

Under questioning from counsel assisting the inquiry Caspar Conde, casino special manager Nicholas Weeks said a similar complaint had been made in the past to board members, including chairman David Foster. Mr Weeks said he was not aware whether the previous complaint had been brought into the current investigation.

Mr Weeks has been running the Star’s Sydney and Queensland casino licences since his appointment in October 2022 by the NSW Independent Casino Commission, following an earlier inquiry, also helmed by Mr Bell, that found existing management unfit to operate a casino licence.

The complaint said it “had become apparent that the board seems largely unconcerned about the Bell II review, and it has taken a fightback stance,” the inquiry heard.

When Mr Conde asked whether Mr Weeks agreed with the complaint that the company had adopted a fightback stance against regulators, he replied: “In light of some of the material I was shown yesterday, there is some parallel between this allegation and some of the material you took me through.”

The inquiry heard that Mr Cooke is not aware of the complaint, even though the complaint was made on February 28.

The first day of the inquiry heard that Star Entertainment was spying on the diary entries of Mr Weeks, including his meetings with lawyers, as part of a “process of preparing for war” with the regulator. That said, Mr Weeks said he would not call the entire organisation “toxic”.

“Toxic is really a very strong term that has been used in this complaint, and it’s a very large organisation,” Mr Weeks told the inquiry. “I have observed that there are areas of Star’s culture that need reform, but I wouldn’t use the language toxic in terms of the broader organisation’s culture.”

Inquiry head Adam Bell, SC, said any allegation against Mr Cooke had not been substantiated, and he had not had the chance to respond to the claim.

Mr Weeks said that given Mr Cooke remained a consultant to Star, he expected there was an imperative for the investigation to move quickly.

Star Entertainment shares slumped 14 per cent to an all-time low of 41.5c on Tuesday, having tumbled 68 per cent over the past 12 months.

The Star casino in Sydney.

Former Star Group chief financial officer Christina Katsibouba told the inquiry that Mr Cooke was reluctant to share the extent of the company’s deteriorating debt position with the rest of the executive leadership team because they might be “scared”.

“Robbie and I didn’t necessarily agree on how much disclosure we have with the leadership team,” said Ms Katsibouba. “My view was that we should be fully transparent with them. I can’t recall the extent of the conversation (with Cooke) but perhaps it was there would be too much concern or scare them somehow and this may impact morale.”

Ms Katsibouba also told the hearing that it was suggested by the company’s investment relations boss Giovanni Rizzo to delay the booking of losses related to a cash machine fraud committed against Star from July to November 2023 to make the company’s trading position look stronger than it was. She declined to follow that advice and booked the losses in July as was appropriate.

Ms Katsibouba, who left the company in March along with former chief executive Robbie Cooke, said she and her finance team had a “negative” view of a material investment proposal presented to the board by Mr Cooke in 2023 that had not reviewed by the finance team.

“Our view was the numbers put forward were unachievable and had some assumptions that drew almost very little parallel to any other experiences in other such venues across the group,” she said.

She said she was disappointed Mr Cooke had not sought her opinion on the proposal, details of which were not released by the inquiry.

She said the announcement of the second Bell inquiry had caused deep concern for the board as it would have an impact on the going concern for the company, with one director discussing options to stop the inquiry.

Ms Katsibouba said she resigned in March after her position became untenable as she felt unsupported, could not get traction on important issues and was excluded on important assets sales including the Treasury in Brisbane.

Mr Weeks told the latest inquiry that he had an online meeting with Mr Cooke around Christmas/New Year where the casino boss indicated competitor Crown Resorts was being treated more favourably by its special managers.

The Victorian Gambling and Casino Control Commission last month held that Crown Resorts would be allowed to retain its Melbourne casino licence, but was on notice from the regulator that Victorians expected it to be “run honestly and free of criminal influence.”

Former Star Casino CEO Robbie Cooke.

“He (Mr Cooke) made some observations about how he felt that the reports did not adequately, or appropriately address, some of the non-casino related matters that the company has had to contend with over the past 12 months,” Mr Weeks said.

“And he made some observations that he felt that the special managers in Victoria in relation to Crown were more favourable to Crown, and he would have preferred that my reports included some of that style of material.”

Mr Weeks said Star has had difficulty completing milestones to improve its corporate governance with a leadership team that was “unsettled and interim”.

The company has had to fill a number of senior roles including chief executive, chief financial officer and chief customer officer. “The casino needs continuing supervision whether that is me or someone else,” Mr Weeks said.

Separately, brokerage Ord Minett warned that Star faced a catastrophe if the Bell inquiry decided it was not suitable to keep its Sydney casino licence.

In a note to clients, Ord Minnett said while it continues to expect Star to prove its suitability in NSW, the risk of the doors closing on its Sydney casino had “risen on the back of the second Bell inquiry”.

“We think there is an almost binary decision at the conclusion of the inquiry – that is, The Star Sydney closes its doors, or it doesn’t,” the brokerage said.

“A temporary closure would be costly. In this scenario, we estimate a daily EBITDA hit of $2m, depending on how quickly Star can flex its cost base, notably labour. A complete cancellation of the license could be catastrophic.”

Star Entertainment’s market capitalisation was $1.18bn at the close of trade on Tuesday.

Lighting testing at Star’s Queen’s Wharf project in Brisbane.