Star Entertainment Set to Pay $9.2M to Current and Former Employees

The Australian casino gaming giant, Star Entertainment Group, is set to pay over $9.2 million (AU$13 million) to former and current staff after it was uncovered that in a six-year period, the company underpaid its employees as it did not provide them with adequate rewards on bonus elements such as penalty rates and overtime.

Star Entertainment Discovered the Discrepancy During a Retrospective Wage Review

Star Entertainment is a multi-billion company that runs casinos in Brisbane, the Gold Coast, and Sydney. After a retrospective wage review of the salaries of team members was made, the company discovered that it underpaid up to 2,200 current and former employees, with some of the discrepancies dating back to 2016.

Moreover, Star revealed that based on the modern awards, it found out that the current annual salaries weren’t sufficient to cover award entitlements like overtime and penalty rates. As a result, the casino gaming giant stated that it plans to take the $9.2 million in its upcoming financial results and thus, start the process of repaying with interest. Speaking of the financial results, Star revealed that it expects a net loss of around AU$73 million to AU$75 million ($51 million to $53 million) and normalized EBITDA between AU$28 million and AU$30 million ($19 million and $21 million).

According to Star Entertainment, both the United Workers Union and the Fair Work Ombudsman have been alerted of the discrepancy. The company said that it improved its training, systems, and processes to make sure that employees receive their full payments in the upcoming period.

The Company Has Been Under a Lot of Scrutiny in the Past Couple of Months

While speaking about the latest development, the group managing director and CEO of Star, Matt Bekier, apologized for the inconvenience that the company caused with the salaries and stated that Star is committed to doing the right thing by being as transparent as possible. He also added that the main priority at the moment is to “address this issue” and make sure that it does not happen again.

This comes a few months after Star faced a lot of backlash concerning illegal activities. An October investigation led by Australia’s 60 Minutes and the Sydney Morning Herald revealed that the company embraced illegal activities, including money laundering, large-scale fraud, organized crime and foreign interference. The report also suggests that even though the board was well-aware of these activities, it decided not to act.

That led to two law firms preparing class-action lawsuits against the company and these developments led to a plummet in its shares. Australia’s gambling regulators are looking to clean up the gambling industry, which is why they have been strict towards operators lately.

Apart from Star Entertainment, regulators are digging their teeth in Crown Resorts, as the company is facing a lot of license suspensions due to the fact that investigations uncovered that the company is tied to a lot of criminal activities and does not meet the standards. In February 2021, Crown’s NSW license was revoked.