The – endorsed – board of the Star casino group has no choice. It simply has to do “whatever it takes” to keep its NSW, and indeed its Queensland, licence. And do it quickly.
Two big points suggest it will succeed.
The first is the example of Crown. The former Packer-controlled competitor has shown precisely what has to be done.
Star essentially just has to follow the Crown road map.
In any event, it’s not as if any of it is rocket science, even though the reform process at Crown was overseen in its concluding stages by a one-time rocket scientist in current NBN chairman Ziggy Switkowski.
All that was really required was for Crown to start doing what it hadn’t been doing: obeying the terms of its licence.
True, Crown had to put in place both the structures and the operating procedures and controls to assure a range of regulators that the requirements would be – rigorously – met.
But again, not rocket science.
The second assurance of success comes from that word “endorsed” in my opening paragraph.
Star does not have to go all the way back to ground zero to find a totally new board and chairman as Crown had to do.
Yes, casino regulator Philip Crawford has ruled that Star the company is unfit to hold a casino licence; and gave the company 14 days to, essentially, come up with the “whatever it takes” to fix everything.
But Inquiry head Alan Bell, SC, on whose report Crawford’s “not suitable” ruling was based, specifically ruled that the four continuing directors of Star, including “interim chairman” Ben Heap, were “suitable person(s) to be concerned in or associated with the management and operation of a casino in NSW”.
So, we have the rather odd situation that while the company has been ruled unsuitable, the company’s directors have been ruled suitable.
Odd but useful. Already-in-place “suitable directors” can swiftly make the company also “suitable’’.
Commissioner Crawford did say on Tuesday that the “board of directors generally ‘had no clue’ what was going on inside the casino operator and, as such, weren’t really doing their job’.”
But it seems to me that doesn’t amount to “unsuitability”; And clearly that was the conclusion Inquiry head Bell came to.
Bell very specifically did not rule on the suitability of anyone who resigned from the board during the inquiry, including most obviously long-time chairman John O’Neill, as it was moot.
Furthermore, apart from then four continuing (for at least the moment) directors the board is being rebuilt.
There is already a newly appointed fifth director, Michael Issenberg, who has got the necessary regulatory approvals and so has explicitly been ruled “suitable”.
Two more are going through the process, including one who was a former director of Crown!
So, Star does now have a board that can get on with it; and just as Switkowski was precisely the person to finish the process at Crown in Melbourne, Heap is exactly the right person for the job in Sydney.
To me, he really must drop the “interim” from his job title, even if he does not intend to stay long term.
At Crown, by the time Switkowski actually got on the board – after meandering through the approval process – his day job, from day one indeed, was essentially the sale of Crown.
It “helped” that he had a Packer – a seller anxious to deliver his 37 per cent controlling stake to a buyer, Blackstone, to seal any deal.
Interestingly, Packer got more for his 37 per cent than the market values all of Star at.
The great irony of it all – at both Crown and Star – is that the Chinese high-rollers that were at the core of their bad behaviour, ain’t coming back post-Covid.