Star Entertainment has been given more time to prove it is suitable to operate land-based casinos in Queensland after the Australian state announced a further delay in a planned licence suspension.
Star was sanctioned in Queensland in December 2022 over a series of failings in the state. The operator was slapped with a fine of AU$100.0m (£52.6m/€61.4m/US$66.7m) and informed its licence would be suspended.
This came in the wake of an investigation into operations at Star Gold Coast and Treasury Brisbane. The inquiry ruled Star was found “unsuitable” to hold a licence in Queensland.
Initially, Star was given 12 months to resolve issues flagged by investigators and prove it was suitable for a licence. The 1 December 2023 deadline was pushed back to 31 May this year after Star submitted a draft remediation plan to address issues. This includes commitments to approximately 640 milestones across 15 workstreams, implemented over a multi-year period.
However, just two weeks before the rearranged deadline, this has now been extended again. The potential licence suspension will now not come into effect until 20 December this year. Queensland’s attorney-general, Yvette D’Ath MP, has approved the extension.
The decision to extend the deadline for a second time comes in the wake of the Second Bell inquiry launching in February. While this is focusing on Star’s activities in New South Wales (NSW), authorities in Queensland say they want to see the results before making a decision on Star.
The term of a special manager appointment for the Star Gold Coast and Treasury Brisbane casinos remains unchanged. This is currently due to end on 8 December this year.
Incidentally, many failings in Queensland were similar to those flagged by Adam Bell SC’s report into Star in NSW. Here, Star was also found unsuitable to hold a licence.
Primary issues include Star’s “concerted effort” to deliberately mislead banks and regulators on the purpose of China UnionPay transactions. This, authorities say, is in contravention of Chinese capital flight laws.
Star also sought out individuals linked to criminal organisations and encouraged them to gamble. This was against the advice of police commissioners.
Investigators also identified social responsibility failings and deficiencies related to anti-money laundering and combating terrorism financing practices. In addition, concerns were raised over Star and its historic dealings with junket operators.
As for the situation in NSW, findings from the second Bell inquiry are due to be filed by the end of May.
Investigators are considering the fallout of the first Bell report. One year after this was made public, a report into Star Sydney’s progress found the casino had implemented 22 of 30 recommended measures from the Bell report.
There is also an additional focus on the culture at Star. This covers risk management culture and Star’s management and reporting lines. In addition, the inquiry is examining whether Star has been able to obtain the financial resources needed to support The Star Casino.
Philip Crawford, chief commissioner of the NSW Independent Casino Commission, said the second report will provide the information needed to make an important decision for Star, its employees, its stakeholders and the wider community.
Against this backdrop of uncertainty, Star has been dealt a series of other blows with several senior staff leaving the business.
In mid-March, it was announced that Robbie Cooke was standing down as group CEO and managing director. Christina Katsibouba will also exit as chief financial officer. The double departure came just weeks after Star said a leadership change is in its best interests.
The exodus continued in April when Jessica Mellor stepped down as CEO of Star Gold Coast. A few weeks later, David Foster left his role as executive chair, with Anne Ward named as his immediate replacement. Foster had taken on additional duties following Cooke’s exit as CEO.
Among the departures, Star also published a trading update for Q3, with this showing a net loss of $6.8m. This, however, was an improvement on the $49.7m loss posted in the same quarter last year.
Other stand-out figures in Q3 include revenue dipping 4.6% to €419.2m, while normalised EBITDA dropped 11.5% to $37.9m.
