The Star’s flagship casino has been given a six-month deadline to regain its licence or face the possibility of closing, after the regulator flagged it was still not satisfied in its ability to run its NSW premises without supervision.
An independent manager has been running the Pyrmont premises since the NSW Independent Casino Commission (NICC) moved to suspend its coveted casino licence in October last year following a damning inquiry which exposed extensive anti-money laundering and counterterrorism failings.
The Star’s flagship casino has been given a six-month deadline to regain its licence or face the possibility of closing,Credit: Oscar Colman
A NICC spokesperson told this masthead The Star now has six months to prove it is able to operate independently or risk its casino’s doors closing.
“The NICC is not satisfied The Star has reached a point where the licence suspension can be lifted and it can run its casino without the supervision of the manager,” the spokesperson said.
“If they can’t prove they are capable of operating with a conditional licence over the next six months, the manager will be retired, and the doors will close,” the spokesperson continued.
The comments are the first public indication the Sydney business is at risk of its casino operations being shut down by the regulator as early as next year.
The ASX-listed casino businesses told the market last month the NSW and Queensland regulators had extended the terms of their respective independent managers to give the business more time to undertake the necessary remediation steps and be granted a licence to operate in both states. Star said at the time the NICC intended this to be the final extension of the manager’s term.
Queensland’s regulatory authorities recently approved The Star’s remediation plan, which was designed to address the issues identified by the Bell and Gotterson casino reviews. The reviews in both states followed a lengthy investigation by this masthead which exposed extensive anti-money laundering and counterterrorism failings across The Star’s three casinos.
But the NSW regulator said the remediation effort demonstrated in Pyrmont had so far been largely attributable to independent manager Nicholas Weeks, who it installed in October last year to oversee the Sydney business after it suspended its casino licence, and not driven by the decisions of Star Sydney itself.
The NSW regulator does not believe 640 steps outlined in the remediation plan are enough to reinstate its licence in the state, and there is growing concern within the body that The Star’s formerly profit-driven culture is at risk of returning if left unchecked.
The Star has embarked on an expensive compliance regime and has overhauled its board and chief executive since the review, but there is concern within the NSW regulator that there are still too many senior executives who have not left the business and may risk undermining its remediation efforts.
A spokesperson for Star Sydney said the group continued to be focused on transformation.
“We know the implementation of the remediation plan in NSW and Queensland requires the utmost rigour and discipline,” The Star spokesperson said.
“We’re also pleased to continue working with Nick Weeks following the extension last month of his role as manager of The Star Sydney casino,” the spokesperson continued.
The Star spokesperson said the extension was not unexpected, “given what has happened in other jurisdictions”. In January 2022, the Victorian regulator implemented a special manager at Crown Melbourne for a period of two years. Weeks was originally appointed at The Star for 90 days with the option to extend at the regulator’s discretion.
The commission has extended Weeks’ term three times and has confirmed his final term will expire in June next year.
The six-month deadline is the latest in a string of setbacks for the embattled business. It recently secured a reprieve from the NSW government following months of taxation uncertainty which sent its share price plummeting last year.
NSW Treasurer Daniel Mookhey implemented a staged levy increase on profits from casino poker machines in August following a proposal from the former Coalition government that risked putting it out of business. The new deal will generate $2.7 billion from the business over the next decade so long as Star Sydney guarantees the jobs of its 3500 strong workforce.
The value of shares in The Star has dropped by 75 per cent over the past year to 56¢, down from $1.63.
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