Star Entertainment Found Unfit to Hold a License amidst Regulatory Scrutiny

Star Entertainment Group Ltd., one of Australia’s most prominent casino operators, faces an uncertain future after an inquiry found it unfit to hold a casino license in Sydney. A comprehensive and damning report by lawyer Adam Bell revealed significant problems like dysfunctional leadership, ethical failings, and toxic corporate culture. These issues remain deeply entrenched, making progress difficult.

Existing Progress May Not Be Enough
A recent Bloomberg report described a corporation mired in the absence of ethics and leadership. An independent ethics evaluation commissioned by The Star in June of last year revealed so-called “shadow values” practiced inside the company that undermined the integrity of operations. The operator allegedly prioritized profit above all else and fostered a culture of internal politics and self-preservation among staff.

Despite all the grim findings, the regulator concluded that after new Star CEO Steve McCann took over, transparency and cooperation within The Star had improved. But he emphasized that the new CEO has only a limited window of time, likely just a few weeks, to demonstrate he can lead the company back to a position where it might be considered fit to operate its Sydney casino.

While McCann achieved some hard-earned successes, The Star’s directors received scathing criticism as the report noted they were unfit for their positions and were part of the broader issues plaguing the casino. This damning assessment underscores the severity of the Star’s problems and severely questions the company’s ability to self-reform under its current leadership.

The Star’s Casino License Is in Peril
The Star’s Sydney casino has been under intense regulatory scrutiny since a 2022 report uncovered extensive compliance failures. The report highlighted that the casino lacked working controls against money laundering, allowed patrons to skirt China’s capital controls, and promoted problem gambling. The NSW government has taken several steps to help remedy these issues, but success has been limited.

The New South Wales Independent Casino Commission (NSW ICC), which received Bell’s report a month ago, is now busy assessing the implications of the inquiry’s conclusions. Philip Crawford, the Chief Commissioner of the NSW ICC, noted that The Star’s governance and cultural issues stretched back decades, compounding for years until they reached the current tipping point.

The release of Bell’s report has only intensified the pressure on The Star. While the local regulator has demonstrated remarkable leniency, a lack of meaningful progress may mean the operator will lose its Sydney casino license in the coming weeks. Such a development would likely see the iconic property sold off, severely impacting the company’s 8,000 Sydney employees.