Star Entertainment ‘Out of Control’ Operations Could Be Its Downfall

Posted on: April 14, 2022, 05:31h. 

Last updated on: April 14, 2022, 07:12h.

Erik Gibbs Read More
Expertise: Asia Pacific Gaming, Gaming Business, Global Gaming.

The investigation in New South Wales into Star Entertainment continues this week. Executives are giving their testimonies about the casino operator’s business, which one hearing leader calls “out of control.”

Star Sydney
Star Entertainment’s Star Sydney casino, seen above. New South Wales officials continue to question current and former executives over the company’s actions. (Image: Inside Asian Gaming)

The grilling of Star Entertainment’s former and current executives in New South Wales (NSW) continues this week. So far, The Australian state has determined that the casino operator broke several rules. It knowingly falsified records to hide the destination of VIP gamblers’ funds and allowed huge cash transactions to occur without proper money-management oversight.

The elaborate and dedicated commitment the company had to skirt its responsibilities for years already led to a request for an extension of the hearing. This week, Paula Martin, Star’s chief legal and risk manager, has been in the hot seat, responding to assertions that the company is “unethical” and “out of control.”

Star’s Situation Continues to Worsen

Star will likely continue to be a casino operator in Australia, but it won’t be under its current management. As Martin took to the stands for the third day, more information surfaced about how the operator repeatedly dodged financial and gaming regulations.

Marcus Lim is a former Star executive who was the subject of an internal investigation in 2019. Questions surfaced about his management activity, including compensation, a “Suncity conflict,” illegal use of a VIP comp program, and more.

Much of the concern revolved around an international rebate program in place at the time. The program was allegedly “out of control,” according to Naomi Sharp, an attorney assisting the NSW hearing. On the stands, Martin rejected this description.

To the best of her recollection, she also asserted that the claims against Lim were never shared with the board. Sharp countered by stating that if they had been shared, they would have made it into the minutes of one of the board’s meetings. However, since Star also allegedly held secret board meetings off the record, the topic remains open.

There’s also the subject of the Chinese UnionPay (CUP) program that repeatedly surfaced. Chinese VIPs were able to use these cards at Star Sydney in NSW, exchanging large amounts of money in violation of policy. Star facilitated the illegal transactions, masking cash withdrawals as “expenses for accommodations.”

Martin allegedly supported the activity, to which Sharp asserted she had “behaved completely unethically.” Martin, however, countered – somewhat quizzically – that the practice was “not intended to be a sham.”

Instead, Star used the program to allow funds to become accessible for gambling. This, in spite of the fact that it was an illegal practice and, therefore, a sham.

Star Link to Suncity Reappears

The continued inquiry highlights a questionable relationship between Star and Suncity, the once-untouchable junket operator that is now gasping for air. As one executive after another takes the stands, the relationship is reinforced, further exacerbating the cloudy prognosis for Star’s future.

Martin acknowledged that Star ignored a “myriad of transgressions” related to Suncity’s activity. Cash irregularly exchanged for gaming chips, the storage of duffel bags of cash on-site, and unqualified persons accessing protected spaces show a culture of irresponsibility.

Martin reportedly knew about the activity as it took place. However, she never informed regulators, despite admitting that “it would have been beneficial” to do so in the hearing.

The ongoing scandal already led to Matt Bekier resigning as Star’s CEO. The board is also shaking things up, but this is only the beginning. Several other executives, perhaps even Martin, may soon follow Bekier’s lead.