Posted on: Nov 25, 2022 11:51 am.
Last updated on: November 25, 2022, 11:51 am.
Star Entertainment are facing difficult times following revelations that it has facilitated money laundering at its venues in Australia. The casino operator’s revenue has increased slightly, but the long-term impact of changes to its operations will force it to spend more.
Star said this week he will incur additional costs of between AU$35 million and 45 million (US$23 million to US$30 million) in FY2023. These are the result of its remediation procedures in New South Wales (NSW) and Queensland.
The news came to light during the company’s annual general meeting last Tuesday. Newly appointed CEO and Managing Director Robert Cooke broke the news to investors as he addressed them for the first time since taking office.
Star is trying to please the regulators
Cooke took over after Matt Bekier resigned and officially began trying to get the company on track last month. NSW and Queensland found that Star did not deserve a casino license for his egregious breach of the rules over a period of years.
An independent monitor, Nicholas Weeks, is now following its day-to-day operations. The company bears the costs of this monitoring.
Cooke estimates that Star’s work to restore fitness next year will be expensive. In addition, there are recurring costs of about 50% of this amount every year thereafter.
The new CEO was able to deliver a small bit of good news to shareholders. He explained that from Jan. 1 to Nov. 15 this year, core domestic revenue increased by 1% compared to pre-COVID-19 figures.
This includes a 32% increase in The Star Gold Coast in Queenland and a 9% increase in Treasury Brisbane. However, The Star Sydney’s 11% decline in NSW partially offset these improvements.
No dice on the in-house monitor
In addition to the independent monitor, Star also brought in its own monitor to appease NSW authorities. However, it missed the target.
The NSW Independent Casino Commission (NICC), a newly established regulatory body overseeing The Star Sydney and Crown Sydney, has informed the company that internal monitoring has been denied. As such, it does not recognize the actions of that entity.
Although Star was found unfit for a license in NSW, the State allowed him to hold on to his properties. However, this is only possible under the supervision and oversight of Weeks, who works for corporate restructuring firm Wexted Advisors.
Appointed by the NICC in October, Weeks will be responsible for operating The Star Sydney for 90 days. His first task is to determine if Star is capable of turning around and becoming a respectable corporation.
Star brought in the law firm Allen & Overy Consulting in August, which got to work immediately. It has already provided reports on the company’s progress, but the NICC apparently found something it didn’t like about the arrangement.
Star announced the commission’s decision but gave no explanation. It just said, “The star does not anticipate that the NICC will consider endorsing or approving any remediation program for any time.”
Online casinos are taking a hit
Australia’s land-based casinos are not the only ones to run into problems. Australia’s Communications and Media Authority (ACMA) continues its crackdown on offshore sites, ordering ISPs to ban nine others.
The platforms either offered banned services or operated without a license. In any case, they will soon lose their access and users must withdraw their funds before it’s too late.
The newest sites are Winning Days, 21Bit Casino, Oshi Casino, Lucky Elf Casino, NeoSpin, Lets Lucky, Boho Casino, Ripper Casino and BC.Game. They join about 635 other websites that the ACMA has blocked since it began in November 2019.