Scrutiny Builds on Australian Casino Sector, as Star Stands in Regulator’s Spotlight

Star Entertainment Group, Australia’s second largest casino operator, looks set to join Crown Resorts in the regulators’ crosshairs, as the New South Wales supervisor increases its scrutiny of the gambling giant.

The Independent Liquor & Gaming Authority (ILGA) has brought forward its review of how effectively The Star in Sydney is complying with its statutory obligations and whether it “remains suitable to hold a casino licence”.

ILGA has appointed Adam Bell SC to undertake the review of The Star’s operations. It has also published the broad terms of reference for the inquiry.

The review was part of a regular review program of work on casinos in the state, said Philip Crawford, chairperson of ILGA.

“Regular reviews of casinos in NSW are required under the Casino Control Act and the last review of The Star was conducted in 2016 by Jonathan Horton QC,” Crawford said.

“These reviews are carried out with the cooperation of the casino operator to ensure the casino remains free from criminal influence or exploitation and doesn’t cause harm to the public interest.”

Vulnerabilities

The review of The Star’s compliance operations follows wider concerns about junkets and other money laundering vulnerabilities across Australia’s gaming facilities. Crown Resorts is in the midst of inquiries into its operations in Melbourne and Western Australia, which have unearthed worrying links to organised crime, including Asian triads.

The choice of Bell has raised concerns in the gambling sector that ILGA is preparing for another damaging inquiry into the organisation’s compliance controls. Casinos have ramped up their historical AML/CTF reviews in recent months, following the revelations from the three state Crown inquiries.

The Australian Transaction Reports and Analysis Centre (AUSTRAC) is yet to reveal whether it will unleash its enforcement team on the listed casino operator, which is yet to secure a gambling licence for its flagship Sydney property.

The Star review will look specifically at the casino’s involvement with junkets such as Suncity, which laundered criminal funds through Crown in Melbourne and Perth.

In August 2020, management told the Bergin Inquiry that The Star was continuing to operate junket programs. These programs continued to run until at least October 2020. The review will explore whether The Star’s dealings with Suncity and other junket operators “raise concerns for [ILGA] as to The Star’s ongoing willingness and capability to comply with its obligations.”

ILGA’s appointment of Bell to lead the review means that the review can build immediately upon the revelations from the Crown inquiry.

Finding skeletons

“If there are any major skeletons in the closet at Pyrmont, Bell will know where they lie,” one compliance industry source said.

“Mr Bell was the lead senior counsel assisting the Bergin Inquiry into Crown Resorts’ Barangaroo casino and, as such, has extensive knowledge of casino regulatory matters in NSW including the issues of concern identified in the Bergin Report,” Crawford said.

“This experience provides Mr Bell with a deep understanding of the current casino landscape, which will be invaluable for this role.”

The review is expected to be filed to ILGA by the end of March 2022.

Related:
Crown Royal Commission submissions raised questions about directors’ duties
Tax Evasion is Illegal, but not an Offence. Does AUSTRAC Understand its Own Risks?

This article first appeared on Thomson Reuters Regulatory Intelligence.

Nathan Lynch is an experienced writer, public speaker, manager and technology enthusiast in the field of financial regulation and risk management. At Thomson Reuters, Nathan leads a team of experts who provide breaking news, deep analysis and practical guidance to risk practitioners in the global financial services sector.
Nathan manages Thomson Reuters’ award-winning Regulatory Intelligence team across the Asia-Pacific region, tracking developments in financial services law, regulation, financial crime and risk management.
Nathan has been involved in building innovative, tech-based businesses in the financial services “regtech” sector — including Complinet Australia and the Thomson Reuters Risk business.

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