Pub billionaire Mathieson lifts stake in under-siege Star

Pub billionaire Bruce Mathieson has lifted his stake in troubled Star Entertainment Group for the second time in as many months despite rising concerns revelations at the second Bell inquiry threatens it Sydney casino licence.

Mr Mathieson and his family company boosted their holdings in the under-siege company to 9.59 per cent from 8.21 per cent previously, spending $18.46m to buy almost 40 million additional shares over the past week.

The richlister said in March he took a long-term view of the prospects of the company, which has “some wonderful assets.” Gaming regulations may prevent further investments by Mr Mathieson, who is the single biggest shareholder in Star.

On Thursday, he declined to comment on the purchase.

The Star in a disclosure to the ASX on Thursday said its constitution as well as gaming regulations in NSW and Queensland prohibited an individual from having a voting power of more than 10 per cent in the company and it may refuse to register any transfer of shares which would contravene the restrictions.

Earlier, the fourth day of the Bell inquiry heard that Star “resented” the intrusion of regulators into its business as it emerged the company was forced to sack staff for falsifying welfare checks on gamblers.

READ MORE: Shock spy claims in Star Casino probe | Star Entertainment profit dives as gaming controls hit | Purge can fix Star, top investor says |

Managing Values principal Dr Attracta Lagan, who was hired as a business ethics consultant last year, told the inquiry that she got the impression at both the board level and from former chief executive Robbie Cooke that they didn’t understand they were operating in a regulated environment and didn’t recognise the rights of the regulator.

“This is very different from a free market environment,” Dr Lagan said. “They didn’t realise how that worked and there was resentment sometimes to the directions that we were giving.”

Bruce Mathieson

Dr Lagan said that not focusing on cultural transformation during that period had led to a new narrative at Star that “everyone is out to get them.”

“That internal story was never there. So instead, a new internal story emerged, which was that the regulator doesn’t like us, they don’t like gambling, the special manager’s too demanding,” she said.

Star fired seven staff members earlier this year after they were found to have falsified welfare checks on gamblers who had stayed for extended periods at its casinos.

Former Star customer liaison manager Ronald Wagemans told the inquiry that an audit of the checks, which required customers to be approached and spoken to by casino staff if the gambling period exceeded three hours, found widespread falsification of records in relation to the policy. Mr Wagemans said in one case earlier this year, guest support officers were alerted via an electronic tracking system to the fact that one customer had spent more than 3 1/2 hours gambling. While the customer was located in the casino, he was not spoken to by staff or asked to take a stipulated 15 minute break.

Mr Wagemans said seven staff had been terminated for falsifying records after it was revealed the practice was “not isolated.”

He conceded that staff who were expected to enforce the policy were under resourced. Mr Wagemans said training consisted of staff being given a booklet that they were expected to read while on shift. “There was a high work load no doubt about it,” he said. “That may have encouraged them to take shortcuts.”

Three hours checks on customers had proved physically impossible to undertake given only two staff members were expected to cover thousands of machines and gaming tables.

Managing Values principal Attracta Lagan

Dr Lagan said Mr Cooke had saved Star from going out of business by undertaking work around capital raisings, but it came at the cost of a cultural reform program.

She said her early impressions of Mr Cooke were of someone “overworked” and forced to be across many matters all at once.

“Mr Cooke was just extremely busy with multiple matters,” she said. “He worked so hard on the business for the first six months that I was there and I would say to him, ‘you’re so busy with the capital raising, bring in an organisational development person. You can’t do this alone’.”

She added that Star workers were trying to do their best given trying circumstances but “never had the right leadership in place.”

Dr Lagan, who had earlier worked with Crown Resorts on its transformation, told the inquiry Star had been slow to change its culture despite a series of consultants being brought into the business.

“If you don’t change the mindsets what happens when those consultants walk away,” she said.

She said there needed to be a paradigm shift in relation to policies around safe gambling with acceptance “you will probably lose on the bottom line but you will lose addictive players”.

“You can still be a profitable business, even with time limits and safer gaming,” she said. “That discussion hasn’t taken place yet.”

The inquiry also heard Star did not undertake a risk assessment into a multimillion-dollar fraud against the company involving malfunctioning ticket-in, cash-out machines.

Star Sydney’s head of risk Eileen Vuong said that even though controls were in place it wasn’t clear “where some of the ownership of the controls lay.”

“So when the machines started presenting that fault it wasn’t escalated as urgently or as appropriately as possible,” said Mr Vuong.

Star Entertainment shares closed up 1.2 per cent on Thursday at 42c.