Star Sydney Faces Fines and New Regulations, But Avoids Licence Revocation
On 17 October, the NSW Independent Casino Commission (NICC) concluded months of investigation with a significant ruling regarding The Star Sydney, one of Australia’s largest casinos. The inquiry, known as the Bell Two inquiry, has resulted in a fine of AU$15 million (approximately US$10 million) alongside a series of new regulations for the casino. However, in a surprising turn of events, the NICC decided to keep The Star’s casino licence intact, at least for the time being.
The Findings of the Bell Two Inquiry
The NICC’s announcement followed an extensive investigation, initiated in February, which unveiled various compliance breaches that raised concerns about the operational integrity of The Star. The inquiry stemmed from earlier scrutiny under the first Bell inquiry in 2022, which already had detrimental effects on the casino’s reputation and financial standing.
The financial penalty announced by the NICC signifies a continued effort to enforce accountability within the Australian gaming sector. Additionally, the commission introduced “a suite of directions and licence conditions” aimed at rectifying past compliance problems. Notably, trading for The Star’s stock on the Australian Securities Exchange (ASX) was halted immediately following the announcement. The company’s stock has already been struggling, plummeting by 40% in September after it failed to release quarterly results.
Monitoring the Path Forward
In the wake of the NICC’s ruling, Star’s management faces an uphill battle to restore its credibility in an unyielding regulatory environment. Nick Weeks, a state-appointed manager, will oversee operations until at least 31 March 2025, ensuring compliance with the NICC’s ongoing actions. Although this ruling allows Star to retain its licence for now, it leaves open the possibility of future reassessments concerning its suitability to operate as a casino-dependent venue.
NICC Chief Commissioner Phillip Crawford emphasized the stringent regulatory requirements imposed, stating, “In a casino setting, compliance breaches can have serious consequences for the community.” This reflects the commission’s determination to closely monitor The Star’s progress while addressing the underlying issues illustrated in the Bell Report.
Implementing Recommendations from the Bell Report
The NICC’s decision included the implementation of recommendations from the Bell Report, released in July. Star will face additional financial and operational reporting requirements and must adhere to more prescriptive regulations governing its board composition and key personnel. A critical concern raised in the inquiry was the inadequacy of its leadership structure, with many key players functioning at a corporate level rather than specifically for the casino.
Among the significant regulatory amendments anticipated are enhanced patron probity checks, in light of failures to conduct proper wealth checks for a substantial number of patrons. This strives to rebuild trust in The Star’s operations and restore its standing in the gambling community.
Changes at the Helm: New Leadership Under Steve McCann
While The Star has suffered significant reputational damage due to regulatory oversights, the appointment of Steve McCann as CEO in June is a breath of fresh air for the beleaguered casino operator. McCann, a seasoned figure with considerable experience from his tenure at Crown Resorts, has been viewed positively by regulators and stakeholders. Under his leadership, Star has initiated a new $200 million financing agreement, providing a lifeline as it navigates these turbulent waters.
Crawford recognized McCann’s efforts in fostering a collaborative relationship with the NICC, noting improvements in communication that signal a shift towards regulatory compliance. However, both the NICC and McCann acknowledge that more significant progress is essential before The Star can be regarded as a compliant and responsible operator.
A Potential Turning Point for The Star
The NICC’s ruling has sparked hope for The Star Sydney and its stakeholders, serving as a possible turning point after a challenging period marked by scandal and scrutiny. The casino has faced a slew of challenges stemming from two major inquiries, which have crippled its operations and led to the resignation of multiple executives.
While the current ruling allows The Star another chance at recovery, it does not absolve the casino of its past mistakes. As stipulated by Crawford, “[Despite more prescriptive supervision], numerous shortcomings in governance, regulatory compliance, technology and risk management remain.” This underlines the importance of sustained diligence and commitment to reform.
With the experiences of Crown Resorts in mind, which successfully regained its casino licences in Victoria and New South Wales, The Star has an opportunity to follow suit. However, it must first demonstrate its capacity to operate within new guidelines and a healthier corporate culture. The landscape may still be rocky, but there is now a defined path forward—a potential rebirth on the horizon for The Star Sydney.
