Star Entertainment Group, the operator of Star Gold Coast and Treasury Brisbane casinos in Queensland, has been deemed “unsuitable” to hold a licence by the state following an inquiry into its casino operations. The review, which echoed similar findings in New South Wales, uncovered a range of institutional failings, including misleading banks and regulators, associations with criminal organizations, social responsibility shortcomings, and deficiencies in anti-money laundering practices. As a result, the Queensland Office of Liquor and Gaming Regulation has suspended Star’s licence and imposed a $100 million pecuniary penalty.
Inquiry Findings:
The inquiry into Star’s casino operations in Queensland identified several issues that raised concerns about the company’s suitability to hold a licence. These issues closely aligned with the findings of a separate inquiry conducted in New South Wales. Key findings included Star’s deliberate efforts to mislead banks and regulators regarding China UnionPay transactions, in violation of Chinese capital flight laws. The operator was also found to have engaged individuals associated with criminal organizations and encouraged them to gamble, disregarding advice from police commissioners. Additionally, the inquiry highlighted social responsibility failures, deficiencies in anti-money laundering practices, and concerns regarding historic dealings with junket operators.
Regulatory Actions:
In response to the inquiry findings, the Queensland Office of Liquor and Gaming Regulation issued show cause notices to Star’s two casinos in Queensland, providing an opportunity for the operator to present evidence to prevent enforcement action. However, the Queensland attorney-general and the regulatory authority ultimately decided to suspend Star’s licence and impose a $100 million pecuniary penalty. The penalty will be paid in three installments: $30 million by March 31, followed by $30 million by June 30, and the remaining $40 million by December 31 in 2023. The licence suspension will commence on a deferred basis for 90 days, starting from December 1, 2023. Nicholas Weeks has been appointed as a special manager to monitor the operations of the two casinos.
Opportunity for Remediation:
The attorney-general emphasized that the deferred commencement date of the licence suspensions provides Star with an opportunity to address the identified issues and restore its management and operations to a position of suitability. If Star demonstrates satisfactory progress, the attorney-general may consider postponing or rescinding the licence suspensions. This offers the operator a chance to remediate its practices and regain compliance before the suspension takes effect.
Trading Halt and Market Impact:
Following the regulatory actions, Star Entertainment Group requested an immediate trading halt on its ordinary shares on the Australian Stock Exchange (ASX). The halt, anticipated to last until December 13, aims to prevent trading in securities in an uninformed market. This action mirrors a similar trading halt implemented by Star when it received a $100 million penalty and licence suspension in New South Wales.
The Queensland inquiry findings and subsequent regulatory actions have dealt a significant blow to Star Entertainment Group, resulting in the suspension of its casino licences and a substantial pecuniary penalty. The identified institutional failings, ranging from misleading authorities to social responsibility deficiencies, highlight the need for improved governance and compliance within the company. As Star endeavors to remediate its management and operations during the deferred suspension period, the operator’s progress will be closely monitored. These developments underscore the growing focus on responsible gambling practices and the determination of regulatory bodies to ensure a safe and compliant gambling environment in Australia.