Star Entertainment Unsuitable for License in Queensland

It is official – Star Entertainment Group is unsuitable to hold a casino license, according to state regulators. News initially broke about the Queensland report late Wednesday. The report finds multiple failings within the company, and Star Entertainment must now answer a ‘show cause’ notice if it hopes to continue operating in Queensland.

Queensland Report Highlights Major Failings at Casino

Attorney-General Shannon Fentiman spoke to the press about the report. She states the report highlights “major failings” by Star Entertainment Group. According to Fentiman, the report “found Star was not forthcoming or transparent in its dealings with its banker or the regulator, and its actions are indicative of a one-eyed focus on profit.”

According to the report, many high-risk gamblers were able to gamble at the casinos in Queensland. This includes those with ties to organised crime. The casinos incentivised these gamblers, despite many being banned in other states.

One of the most damming findings of the report is $55 million in revenue disguised as hotel expenses. These funds were provided via credit cards or through Cina UnionPay debit cards. According to Fentiman, “They made a concerted effort to obscure the purpose of these transactions and deliberately mislead the regulator and their own banker.”

Regulators Accept Recommendations on How to Proceed

The reports regarding Star Entertainment came from former Court of Appeal Judge Robert Gotterson. Furthermore, Gotterson is making 12 recommendations on how to proceed with Star Entertainment, and regulators accept these recommendations.

Some of the recommendations made are as follows:

• Establishing regular investigations into Star’s Queensland casinos.
• Instituting limits on cash transactions.
• Creating a card system for pokies and gambling similar to card systems in other regions.
• Moving towards entirely cashless transactions at the casino.

There are also recommendations to improve the transparency of casinos and compel them to cooperate fully with any future investigations from the agency. This was a problem in the inquiry. According to Gotterson, “Star was indifferent towards giving a full account of the factual situation, or even worse, misrepresenting it.”

What Happens Next for Star Entertainment

After releasing the report’s findings, regulators are issuing Star Entertainment a ‘show cause’ notice. This notice gives the company 21 days to explain why the casino should remain open. After this point, regulators will decide the casino’s future.

According to Attorney-General Fentiman, there will be consequences for Star’s past actions. These will certainly consist of fines and restrictions. Also, we could likely see a suspension or revocation of Star’s Queensland licence.

Star Entertainment operates two casinos in Queensland and is building a third, so it is in the company’s best interests to come up with some form of arrangement with regulators. It is also very likely that regulators require that Star Entertainment Group go under new ownership to keep its licence.

This is similar to what we saw with Crown Resorts. Crown had to sell the company and change its corporate culture to keep a licence. However, for Star Entertainment, we will likely see a prolonged period of examination by regulators. The casino will be closely scrutinised over everything it does for the foreseeable future.

As part of the recommendations from Gotterman, regulators will likely appoint a special manager for Star Entertainment. This will be a requirement for whoever holds the licence going forward. Also, the special manager will help ensure that Star Entertainment adheres to any new guidelines from state regulators.

However, it will likely be months before we know the full extent of any penalties or requirements on the casino. We will keep you informed on any important information regarding this story.