Fireworks During First Weeks of NSW ILGA Star Casino Inquiry

Fireworks During First Weeks of NSW ILGA Star Casino Inquiry

That escalated quickly. Public hearings began on 17 March into the dealings of The Star Entertainment. The NSW Independent Liquor & Gaming Authority has been hearing testimony from a variety of executives and investigators as to the suitability of The Star to keep its casino license. Accusations came quickly and already led to Star CEO Matt Bekier resigning from the company.

Independent Review Begins

The Star Entertainment came under scrutiny in New South Wales in light of the Crown Resorts hearings and investigations in the past few years. While the Star faced scrutiny from regulators and lawmakers across Australia, The Star failed to look internally at its own dealings.

The same media companies that exposed Crown’s faults – The Sydney Morning Herald, The Age, and 60 Minutes – looked into Star. And in October 2021, 60 Minutes aired the results of its investigation.

Under the Casino Control Act of 1992, the NSW Independent Liquor & Gaming Authority (ILGA) began its own investigation. NSW ILGA Chairman appointed Adam Bell, an attorney from the Bergin Inquiry team, to head up the Royal Commission.

Bell started his investigation in late 2021 but insisted on public hearings. The ILGA approved. Hearings began on 17 March. And Bell’s final report on the matter is due 30 June 2022.

Damning Evidence on Day 1

The very first day of hearings started the road of bad news turning to worse news.

Testimony started with the revelation that Star Entertainment concealed nearly $1B in suspicious financial transactions. They were linked to Chinese high-stakes gamblers. Star executives knew of those 157 transactions and that they were misrepresented as company expenses. That figure is five times that revealed in the Crown hearings.

Things got no better in subsequent hearings.

The Royal Commission examined a 2018 KPMG risk assessment report. It accused Star of terrorism risks and fundamental deficits in the company’s money laundering program. It had been presented to Star executives years ago, but CEO Bekier questioned its authenticity and accuracy. Bekier reportedly threw the report on a table and appeared to sulk about it, even becoming hostile when speaking of it. He eventually convinced other executives that the report was faulty.

Video Footage as Proof

Investigators presented security camera footage dating back to 2018. The person of focus in the video worked for a Macao-based junket operator. He reportedly gave a gambler a bag of bundled $50 bills. This was in direct defiance of a cash transaction ban pertaining to these exact kinds of situations.

Suncity representative Alvin Chau, allegedly connected to organized crime and barred from traveling to Australia, put a stop to a high-roller room at Star. However, he opened another one a month later and continued to do business as usual. Meanwhile, Bekier falsely claimed that Star and Suncity agreed jointly to stop the business. Bekier and other executives dismissed other reports from investigators through the years.

Another document presented at the hearings showed that a Chinese high-stakes gambler spent $11M on a debit card in one day in 2015 at the Sydney casino. Chinese-owned UnionPay was the bank hosting the debit card. It prohibited the card’s usage for gambling, but Star misrepresented the charges. They categorized them as entertainment and accommodations. The casino also changed that gambler’s cash limit from $12M to $23M without that gambler’s knowledge.

Star Compliance Manager Graeme Stevens said that executives throughout the company knew of massive cash transactions by Suncity people. He said that the company’s top attorneys knew about it. And he admitted to not informing the regulator.

Star Regulatory Manager David Aloi admitted to misconstruing charges to cover large transactions. He said that he was uncomfortable with it, as it deceived UnionPay. However, everyone seemed to go along with the plan.

CEO Resigns

On 28 March, as the hearings continued, Bekier resigned as Star Managing Director and CEO. The board accepted that resignation. Bekier stepped down, effective immediately. He did, however, vow to assist in any transition requiring his assistance.

Bekier said that he felt it was his responsibility to step down and accept the fact that he did not uphold the company’s policies.

On 1 April, Star Entertainment put John O’Neill AO into the Executive Chairman position to fill the void left by Bekier. O’Neill accepted the temporary position with its $1.5M annual salary. Meanwhile, an executive search firm embarked on a search for a permanent replacement. The board acknowledged the need for executive changes. The notice said that more announcements will follow, but they had to maintain some stability during the CEO transition period.

Hearings to Continue

Another week of hearings ensues this week. Witnesses will include Star Chief Financial Crime Officer Skye Arnott, and members of the general counsel team, as well as Chief Risk Officer Paula Martin and Senior VP of Premium Services Operations Mark Walker.

The next week will see more Star executives testify. That list includes Chief Casino Officer Greg Hawkins, CFO Harry Theodore, and Bekier himself. All eyes will be on the Bekier testimony in particular.

 

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Rose Varrelli

Rose Varrelli has always been passionate about online casinos, as she’s been a player at a variety of places for years. Rose turned her personal knowledge and insight into a writing career. She aims to provide readers with the most up to date, informative news in the world of online casinos!

Author: Bob Reynolds