Ann: Trading Halt, page-2

AFR article.

Star Entertainment will face a second major inquiry into its Sydney gaming operations after the state’s casino regulator said it was not satisfied that the company had made sufficient changes to be allowed to regain its license.

Adam Bell SC, the Sydney barrister who conducted an earlier inquiry into Star’s Sydney casino, has been appointed to run the review. It is due to conclude in May.

The Star needed to work quickly to convince the regulator it should not lose its provisional casino licence. Louise Kennerley

Mr Bell, in his first report published in 2022, found Star was unsuitable to hold its casino licence, describing its operations as “a case study of unethical conduct and cultural failure” which allowed $900 million to be washed through its casino. “The culture which the board of Star Entertainment thought it had set bore little or no relationship to the real culture which was seen in the evidence presented in this review, the way things operated at Star Entertainment when no one was watching,” Mr Bell found.

That inquiry led to the resignation of the company’s board and its then chief executive, Matt Bekier. Star’s share price has slid from more than $3 before the inquiry to just 56¢.

The Independent Casino Commission in NSW said M Bell’s first report indicated the company needed deep structural change to prevent further misconduct

“There was a substantial shift required and The Star has had 18 months to demonstrate that it has the capability and resources to regain its casino licence,” said Philip Crawford, the chief commissioner. “The NICC has had concerns about the extent that remediation is attributable to the manager’s oversight and direction versus what is being driven by The Star’s reform agenda.”

The new inquiry will start today and run for 15 weeks. Hearings will not be public.

“There is much at stake for The Star, so the NICC is giving the casino every chance it can to demonstrate whether it has the capacity and competence to achieve suitability,” Mr Crawford said. “This includes meeting its financial obligations under the casino licence and funding its remediation program sufficiently.”

Mr Crawford had warned Star in December that he was not satisfied with its ability to run its flagship casino without supervision, despite a large investment in remediation programs. The move exacerbated pressures at the casino operator, which late last year secured a reprieve from the NSW government after months of uncertainty over tax rate increases that it said would put it out of business.

The company’s chief executive, Robbie Cooke, had previously floated selling the Sydney business after slashing more than $2 billion from the value of its three casinos. In August, Star said that was off the cards.

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