The future of The Star Sydney is in serious doubt after the NSW Independent Casino Commission (NICC) released a report on Friday that said Star Entertainment Group is unsuitable to hold a casino license in the Australian state.

The NICC said it is considering its next steps after the regulator made public two volumes of the Bell Report, an inquiry into the company’s suitability to run a casino being run by senior counsel Adam Bell.

Second Report Finds Progress Slow, Overdue

This is the second time such a report has been issued against Star in recent years. In August 2022, Bell released his first review of the company, finding that the firm was unsuitable to hold a casino license. As a result, the NICC suspended The Star’s license indefinitely in October 2022, due to failings by the casino to uphold anti-money laundering and counter-terrorism regulations.

The casino didn’t shut down, but it was forced to operate with a manager appointed by the NICC. The regulator chose Nicholas Weeks to oversee the casino’s operations, a role he remains in to this day.

However, the new report suggests that putting Weeks in charge wasn’t nearly enough to turn The Star Sydney around.

The new report found that the period since the last inquiry was “marked by lost opportunities and missteps” by the company. Several significant compliance issues were outlined, including breaches of rules that put a three-hour limit on gaming for players without taking a break, and falsification of records to suggest that staff had intervened in long gambling sessions when no such intervention had taken place.

The report also makes note of a software glitch in ticketing machines that allowed gamblers to claim funds they hadn’t won for a six-week period.

In a statement, the NICC criticized Star Entertainment, but went short of saying what its next steps would be, or if The Star’s license was in jeopardy. 

“The Bell Report reveals a company that had not moved quickly enough to address the governance and cultural concerns raised in the first Bell Report,” NICC Chief Commissioner Philip Crawford said in the statement. “It has only very recently turned its attention to dealing with challenges that should have been prioritized earlier.”

Star Halts Trading in Wake of Damaging Report

Earlier this year, public hearings in Sydney revealed text messages in which other senior managers at The Star were plotting to get rid of Weeks, and were considering a plan to “go to war” with the NICC. 

“Another angle is establishing grounds if possible for a class action from shareholders against Nick Weeks or NICC,” Star Entertainment Group Chairman David Foster wrote in a January 2024 text to then CEO Robbie Cooke. 

“I find it extraordinary that the chairman of a listed company and the CEO exchanged messages contemplating a class action from shareholders against me personally and the NICC in circumstances where their public position and their position with me was that they were working cooperatively to address deficiencies that they need to address,” Weeks said of the messages after learning of them in April. 

Star responded to Friday’s report by halting trading in its stock while considering the report and its implications. The company has also postponed the release of its 2024 fiscal year financials, which were due for publication on Friday morning. 

(Image: James Gourley / Australian Associated Press)