Australia’s Gambling Industry Faces Turning Point as Star Sydney Faces Closure
Posted on: September 14, 2022, 07:36h.
Last updated on: September 16, 2022, 05:00h.
New South Wales (NSW) has wrapped up its inquiry into Star Entertainment, reaching an initial assessment that the casino operator doesn’t deserve to run The Star in Sydney. The fallout from that decision, including the potential closure of the property, could be more serious than many realize, and may spark a complete shakeup of Australia’s entire gaming industry.
When Adam Bell turned in his findings from the inquiry, he concluded that Star is unfit to operate in NSW. It’s the same conclusion he reached about Crown Resorts, which temporarily lost its license in the state.
NSW Premier Dominic Perrottet has now put Star Entertainment on notice. It has two weeks to justify itself and show why it should retain its rights to The Star. If it doesn’t, he is ready to shut it down, according to ABC News.
Both Star and Crown Resorts have faced allegations that they repeatedly allowed money laundering and fraud to occur right under their noses. Known criminals gambling at their properties were identified as part of their standard operating procedures.
Bell’s recommendations aren’t the final word on what happens to Star, although he has a perfect track record in casino operator inquiries. Still, Perrottet’s ultimatum and threat indicate that the state wants to hear Star’s side of the story once more before it makes a decision.
Star has been absolutely horrendous, they’ve got 14 days to respond to that report and if they don’t comply, they’re likely to close,” said NSW Premier Dominic Perrottet.
The new NSW Independent Casino Commission (NICC) will determine what happens next. NSW created the regulatory body specifically because of Crown and Star’s violations. Gambling supporters and opponents will closely watch it as it issues its ruling.
Star already admitted its failings several times during the inquiry. This led to the ouster of several leading executives and board members, with more changes coming.
Among those many transgressions was the company’s involvement with SunCity Group, once the largest junket operator in Asia. SunCity had its own cash cage at The Star in what amounted to its private room, Salon 95.
This directly violated gaming regulations, as the arrangement afforded no oversight to ensure adherence to anti-money laundering (AML) rules. In addition, casino executives admitted to lying to regulators about the nature of Salon 95. This is an indication that they knew what was going on inside.
Active Circumvention of Controls
Tightening the noose around its neck, Star explained how it created a process to allow Chinese high rollers to get money out of the country. It held bank accounts in Macau, where the VIPs could make their deposits. In just one account, Star facilitated deposits of about $153 million.
A Star employee lived and worked in Macau to pull off the ruse. When a high roller wanted to make a deposit, the employee and the individual visited the bank. The gambler presented the money, and the employee presented a letter that Star was making the deposit.
That only worked for a while, though. When China began cracking down on Macau money operations, Star turned to a junket operator, Kuan Koi, to fill the void. Eventually, Star set up its own company so VIPs could funnel their money out of China.
Call for National Regulator
The debacle with Crown and Star, as well as with other casino operators, is reaching a boiling point. If the situation had only involved Crown, then most people would have called it an isolated incident perpetrated by a rogue company with no moral compass. Now, things are changing.
Minister of Parliament Andrew Wilkie, a staunch gambling opponent, wants Australia to create a national gambling regulator. He believes allowing the states to maintain control isn’t working.
Wilkie suggests the regulator could work with the Australian Federal Police and Australian Transaction Reports and Analysis Centre (AUSTRAC) to ensure compliance. He believes state regulators aren’t doing enough to oversee the industry and that monetary fines and supervision aren’t enough.
Australian Prime Minister Anthony Albanese disagrees. He believes the state regulators are doing a “pretty good job” and indicated that he doesn’t support stricter regulations.
Despite Albanese’s position, it’s obvious that changes are coming. Casinos mean big business in Australia, but the push to have them corralled is gaining significant momentum. As such, politicians and legislators at all levels have to respond.
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