The Star considered "not suitable" to retain its casino license by inquiry counsel

Naomi Sharp, the counsel assisting the New South Wales inquiry into The Star Entertainment Group in Australia, has recommended that the company does not retain its casino license in the jurisdiction. Sharp pointed out Tuesday that not only was the company “at the beginning of its journey” to remediation, but also that the evidence provided by the executives so far has not been credible. More than a dozen of them resigned following the inquiry’s revelations. 

Speaking of allegedly unreliable testimonies such as the ones by Chief Legal Officer, Paula Martin, Chief Financial Officer, Harry Theodore and group treasurer Sarah Scopel, Sharp said: “It is not enough to bring a corporation into suitability simply to terminate the employment of or part company with a number of senior officers”, as reported by the Australian Financial Review. 

With the beginning of the three submissions closing days on Tuesday, she also said Star has not yet undergone “deep reflection on what has gone wrong” in Sydney, and it should not enjoy the “privilege” of a casino license until it fixed its practices. 

Tuesday's closing submissions come shortly after The Star Entertainment’s outgoing executive chairman John O’Neill was replaced by Queensland casino boss Geoff Hogg as acting CEO of the Group, while non-executive director Ben Heap will be taking on the role of interim chairman that O’Neill also left, with both roles to become effective June 1.

Since The Star saw itself involved in the investigation in March, executives such as former chief executive Matt Bekier, chief financial officer Harry Theodore and others have stepped down from their jobs. Director Gerard Bradley and Sally Pitkin have also committed to leaving the board in the coming months. 

Should the Star be found unsuitable to hold a casino license, the decision would mirror the one made by NSW Bergin inquiry and Victorian and WA royal commissions into rival casino operator Crown Resorts, which was deemed unfit to hold a license but yet allowed to continue gambling in Perth and Melbourne under supervision.  

The closing submissions came as the Queensland government called on Star to testify as its inquiry into gambling and money laundering reform. Attorney-general Shannon Fentiman has pushed back on holding a separate public inquiry into Star’s sustainability to hold its Brisbane and Gold Coast casino licenses, but the proposed laws would enable her to do so. 

Sharp accused the Star’s three top lawyers who gave evidence of “unethical and dishonest” conduct, singling out group general counsel Andrew Power for engaging in what she described as “deliberate obfuscation” and Paula Martin as allegedly being “evasive”, “non-responsive”, “extremely pedantic” and ultimately “highly unsatisfactory witness”. 

She also described general counsel corporate Oliver White as “remorseful”, and considered his testimony more reliable than that of his colleagues. When speaking about Theodore, she deemed him as “very reluctant to make concessions in his evidence when they were fairly called for”, and said he outlined conduct that was “of very considerable concern”. 

According to Sharp, Scopel’s evidence “changed significantly” throughout her testimony and pointed at her excuse for misconduct as lacking “foundation” given her senior position. 

Finally, she claimed to be of the opinion that former NSW casino chief Greg Hawkins gave “less than complete” testimony and suggested he had a track record of giving “false evidence” to the Bergin inquiry into Crown. 

Former Star CEO Matt Bekier.

But she also recommended that Bell accept the testimony of several witnesses who she deemed honest and credible, and willing to take responsibility for elements that went wrong, such as former CEO Matt Bekier who, in her own words, was “a frank and candid witness” who made appropriate concessions. She also singled out Sally Pitkin as “the director who has reflected most deeply and critically about what has gone wrong” within Star. 

She considered all of the directors, including John O’Neil, Sally Pitkin, Katie Lahey, Gerard Bradley, Ben Heap and Richard Sheppard, as “witnesses of the truth”. 

While the significant majority of these witnesses resigned before or during the inquiry, or indicated their plans to do so, Sharp stated that it is no longer necessary to make findings about their sustainability. 

Sharp also accused Star of “serious failures” in its risk management frameworks, making “misleading” representations to the NSW gambling regulator, having “lack of supervisions of the international VIP team” and “certain shortcomings” regarding high rollers. These issues are to be discussed in the next two days before Star makes its submissions in response later in June. 

The NSW gaming regulator’s inquiry has been examining claims that the Star enabled suspected money laundering, organized crime, fraud and foreign interference at Star Sydney as part of assessing whether the venue should retain its casino license. 

The 36-day inquiry has resulted in evidence that gang-linked junket operator Suncity ran an illegal cage at the casino, that the venue flouted rules on the use of Chinese debit cards, and that staff lied to banks and did not do enough in dealing with regulators.  

On Monday, Crown Casino in Melbourne was fined a record AUD 80 million (USD 57 million) for a scheme that allowed an illegal transfer of funds from China, as a Victorian royal commision into Crown uncovered that foreign punters were able to use a China Union Pay (CUP) bank card to access funds to gamble at the casino between 2012 and 2016. The decision came a few days after Crown shareholders voted in favor of a previously unveiled business sale to New York-based alternative investment management company, Blackstone, now under consideration of the casino watchdog.