Criminal exploits hit Star
Casino group still ‘unfit’
Casino group Star Entertainment was leaderless and susceptible to criminal exploitation as it lagged more than a year behind in remediation efforts, the Bell II inquiry has heard.
Counsel assisting the inquiry Caspar Conde said a $3.2m fraud committed against Star last year involving malfunctioning cash machines showed the company was still vulnerable to criminal activities as the ranks of its senior executive team remained depleted.
Mr Conde in closing submissions to the inquiry said the fraud, which allowed winning gambling tickets to be reused in ‘ticket in, cash out’ machines, was committed by 18 people who undertook 1800 fraudulent transactions.
The inquiry, the second by Adam Bell SC into whether Star is suitable to retain its Sydney casino licence, heard the fraud was a failure of internal controls at the company.
“The sort of criminals who can put together a racket of that kind in a short space of time, conduct 1800 transactions and extract $3.16m, they’re just not the sort of people who should be anywhere near the casino,” Mr Conde said. “And they do present a risk to members of the public. So there is a risk beyond just money being lost by the Star.”
Mr Conde said staff who had visibility over respective business units failed to appropriately escalate, investigate and raise the errors in the operation of the ticketing machines.
He said it may not be possible to decide a time when Star Entertainment would be suitable to retain its Sydney casino licence, as he summarised evidence from former executives and board members that pointed to continuing regulatory missteps. Mr Conde referred to a “lost 14 months” in the company’s reform efforts between Mr Bell’s first inquiry in 2022 and his current inquiry.
The first inquiry resulted in the installation of a special manager to run Star’s casinos in both Sydney and Queensland after Mr Bell found breaches of money laundering rules and other misconduct.
Mr Conde said Star had since then failed to accelerate a changed culture at the troubled casino group, with delays in appointing a CEO of its Sydney casino, who could have more closely supervised operations.
An earlier witness in the inquiry Dr Attracta Lagan, who was brought in as a business ethics consultant for Star, had flagged to the board and CEO since early 2023 the need for an organisational development specialist to shape cultural change.
“This is an early manifestation of what I’ll call the lost 14 months and I say that because it’s been more than 20 months since your report of August 2022,” Mr Conde told the inquiry. “There’s evidence of Star being about six months in on its transformation journey of three or up to five years, but they’re not 20 months down that journey.”
Star Entertainment was ‘leaderless and depleted” as it faced growing regulatory and financial challenges, he said.