Administrator on the cards for ‘arrogant’ Queensland Star casinos

A special administrator could run Star casinos in Queensland under an option being considered by the state-run inquiry.

VIP Premium gaming room in the Star Casino on Queensland’s Gold Coast.

A special administrator could run Star casinos in Queensland under an option being considered by the state-run inquiry as the interim boss of the gaming giant conceded it had been “arrogant” and needed to “transform our culture”.

After Star was issued a 14-day show cause notice to prove it was suitable to retain its Sydney ­casino licence in this week’s damning Bell inquiry report, the listed company is facing similar action over its Brisbane and Gold Coast casinos later this month.

It prompted a belated concession on Thursday from Star ­Entertainment interim chairman Ben Heap that the company has been “arrogant” and “closed off to criticism” as he fights to retain a hold on its ­casino licences in both states.

In his first comments following the Monday release of Adam Bell SC’s report into Star, Mr Heap said the group needed to earn back the trust of the gaming regulator and “we will do everything in our power to make the necessary improvements”.

Mr Heap, who has been a Star director since 2017 and replaced John O’Neill as chairman in June, acknowledged the company needed to accelerate its remediation. “It is clear from the report that we need to fundamentally transform our culture.

“I accept that there have been times we’ve been arrogant and closed off to criticism,” he said.

“That will not be the case in the future.”

The Queensland inquiry, headed by retired Court of Appeal judge Bob Gotterson, who will ­deliver his report on September 30, has been asked to provide ­advice to Attorney-General Shannon Fentiman about the “ongoing suitability” of Star to hold a casino licence in the state.

It is understood consideration is being given to issuing a provisional licence to Star, with its operations overseen by a special administrator. A regulator, similar to the newly created independent ­Casino Commission in NSW, is also likely to be recommended in Queensland.

The final report of the Bell inquiry, which held 46 days of hearings, concluded that Star was unsuitable to manage a casino and is facing being stripped of its licence and fines of up to $100m.

The Bell report found that the company, with a market value of more than $2.6bn, set up an “inherently deceptive and unethical process” disguising more than $900m as hotel expenses to allow wealthy Chinese gamblers to bet at the venues, failed to check the source of the money and knew for years it was in breach of the rules.

The Gotterson inquiry was told in August that many of the problems didn’t stop at the Queensland border, with Star accused of a “one-eyed focus on profits and money” and evidence given of its failure to ban suspicious high-roller gamblers.

Some of them had already been banned by police in NSW.

The company is building the $3.6bn Queen’s Wharf resort casino in Brisbane’s CBD, in a joint venture with Hong Kong partners Chow Tai Fook and the Far East Consortium.

In August, The Australian ­revealed Chow Tai Fook’s links to Macau gambling boss Stanley Ho and his alleged triad connections and that these were raised as a concern during the state government probity check for the Queens Wharf casino licence.

Star attracted the ire of independent Casino Commission head Philip Crawford, who said he was not getting the “vibe” that Star understood its “problems”.

“I’m afraid the cultural, institutional arrogance hasn’t changed much; there is still an unwillingness to show the right level of transparency,” he said.

Mr Heap is the only Star director who intends to stay at the company, with all board colleagues all flagging their departures during the Bell review hearings.

He said in coming days Star would respond to the NSW independent Casino Commission’s show-cause notice and plead its case on “why we should be able to continue to operate”.

Instead of shutting down junkets bringing in major overseas gamblers, the Bell report found Star let them continue to operate, “a collective decision … which reflected a culture in which business goals were given undue priority over regulatory, money laundering and terrorism financing risks”.