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Just 18 months after imposing a $100 million fine on Star Casino, the New South Wales Independent Casino Commission (NICC) has initiated another investigation, potentially putting Star Entertainment’s license on the line.

Many are now questioning the regulatory body’s perceived leniency towards the gaming operator, considering their ongoing failure to comply with casino operating standards.

Adam Bell has been appointed to lead the investigation, aiming to confirm suspicions of the casino operator’s non-compliance with industry standards and regulations, as well as its apparent inability to address these issues. A comprehensive report is expected by May 31st. The regulatory climate for both land-based and online casinos in Australia has maintained a strong stance on enforcing licensing terms while also being fair to operators. However, with thousands of jobs on the line, the critical question arises: how many chances should The Star be given before its license is revoked?

The Star Entertainment Group’s Record of Transgressions at Sydney Casino

According to Bell’s 2022 report on the initial inquiry, Star Casino was found to have significant risk management, cultural, and governance problems. The investigation saw through the veil of false transparency and accountability by identifying falsified bank documents, unethical and deceptive communications with various banking authorities, unaccounted funds indicating laundering activities, and the organization’s disregard for counter-terrorism financing measures. The final report highlighted a high probability of tax evasion, with over $900 million in banned betting transactions.

Despite the casino’s serious violations of regulatory standards, there was widespread surprise when its license was not revoked. The regulatory body, the NICC, noted that Star Entertainment Group expressed deep regret for their actions and a firm commitment to reforming Star Casino to meet industry standards. Philip Crawford, the NICC chair at the time, argued against revoking the license, citing the illogical outcome of potentially causing thousands of job losses during challenging post-pandemic economic conditions. Instead, an external manager would be appointed to supervise Star Casino’s daily operations to ensure compliance.

How Star Casino Performed Following the 2022 Review

Prior to the 2022 investigation, Star Casino’s share price was above $3, resulting in a $2.7 billion market value for the company. Fast forward to 2024, and the enterprise’s market value has dropped by over half, totaling $1.3 billion. Star Entertainment Group had steadily regained profitability before the unexpected announcement of a second investigation. In the first half of the fiscal year 2024, net profits were $9.1 million. This significantly improved over 2023 figures, when the group lost $1.26 billion. Since the announcement, revenues have declined by 14.6%.

In addition to the revenue decline at Star Casino Sydney, both the Treasury Brisbane and Star Gold Coast have also experienced decreases, reflecting a broader trend in land-based casinos. This can be attributed to several factors, including increased competition, consumer spending returning to normal levels, and the introduction of stricter regulatory guidelines. Despite these challenges, the current CEO, Robin Cooke, is optimistic about the organization’s remediation strategies. He highlighted that Star’s main priorities are establishing a robust governance framework, implementing enhanced accountability measures, strengthening its risk management capabilities, and ultimately rebuilding player trust.

Star’s Response to a Second Probe

Following NICC’s announcement, Star filed a halt request with the Australian Securities Exchange (ASX). The group stated that it sees the new probe as an objective forum, providing an opportunity to demonstrate its commitment to upholding the terms and conditions of its NSW casino license. Despite their confidence, the market reacted to the announcement with panic, with stocks falling immediately. The following days saw the trading of nearly 60 million shares. 

The NICC has yet to be satisfied with Star Casino’s progress in implementing corrective measures, resulting in the extension of the regulator-appointed external manager’s term last December. Star Entertainment Group maintains that it is fully committed and willing to work with NICC to resolve any concerns. The group also pledged to keep stakeholders updated on the pending 2024 H1 financial reports and any new developments related to the second probe.

Final Word

Star Casino’s second inquiry has captured the attention of numerous industry observers. Speculation is rife about how many chances the organization will be given before its license is revoked. However, the regulator is more concerned about the potential fallout, especially given the casino’s significant workforce. While a final decision has not been reached, two possible outcomes are being considered: revocation of Star Sydney’s casino license if the findings of the second Bell report are severe or an extension of the casino license suspension with the continued oversight of a commission-approved external manager until full compliance is achieved.