The Star Sydney Casino in Australia’s biggest tourist city will not close despite owners Star Entertainment Group being fined $62m for failing to stop money laundering.
The New South Wales (NSW) Independent Casino Commission on Monday slapped Star with a record fine for what it claimed was “institutional arrogance” around money laundering laws.
The penalty was handed out after an independent enquiry found Star had opted for a “cavalier” approach to governance, and at times deliberately moved to cover its tracks.
But it stopped short on requesting the casino close, due to concerns it would put thousands of jobs at risk.
This is the latest in a string of fines to be handed down to casino companies in recent months as Australia cracks down on illegal practices.
Gambling is legal in Australia but only at licensed premises or via licensed online sites. However, governments of individual states are being urged to rewrite their gambling laws and close in on illegal activity.
What Happened With Star Sydney Casino?
Star Entertainment Group (SGR.AX) has been fined A$100m ($62m) and had its license suspended.
The fine was in response to a damning inquiry that backed up undercover media reports that widespread criminal activity was taking place within Australia’s casino industry.
The inquiry heard that Star allowed money laundering activity to take place on its property, and allowed organised crime gangs to infiltrate the casino. Regulatory chief Philip Crawford said at the time that “the institutional arrogance of this company has been breathtaking”.
The inquiry concluded earlier this year and led to CEO Matt Bekier resigning. His replacement Robbie Cooke started his first day in the job on the day the fine was handed down.
It is not the first multi-million dollar fine thrown at a casino for governance failures this year. I Queensland, Star was found unsuitable to run its three casinos in the state.
And Crown Resorts in Victoria was recently fined A$80m for failures to stop criminal activity.
#BREAKING: The Star’s licence to operate its Sydney casino will be suspended from 9am this Friday, the NSW Independent Casino Commission has announced.
— Gavin Coote (@GavinCoote) October 16, 2022
Will Star Sydney Fine Hurt Visitors?
Thankfully for Sydney’s gambling industry, the record fine handed out to Star Entertainment should not overly impact the gambling experience at the casino.
Star Sydney sits in the Pyrmont area of Sydney, in the heart of the city. It has previously promised to increase security staff at the premises, improve surveillance, end VIP trips known as “junkets” and implement leadership changes.
All this should make the tourist experience visiting Star Sydney much more relaxed. A spokesman said the company is committed “to charting a path back to suitability”.
Indeed, the NSW inquiry stopped short on recommending Star Sydney be shut down. The suspension of the license means it can still operate, but that it will come under scrutiny from government officials.
It is the same deal that was handed to Crown Perth this October. The casino has until March 2024 to prove that it can hold a casino license.Â
Star’s share price was halted Monday in response to the fine, before rising 5.51% two days later to 2.87.
