Star Entertainment Accused of Embracing Illegal Activity in New Report

It’s beginning to look like Crown Resorts isn’t the only casino operator in Australia to be in trouble with lawmakers and regulators. Crown and its willingness to circumvent globally-established money-laundering rules while allegedly allowing criminals to gamble at its casinos has caused a domino effect that could bring down Star Entertainment, as well. If Star thought it would emerge unscathed in the battle to clean up Australia’s gaming industry, it might soon realize how wrong it was.

Star Entertainment Embraced Criminals, Asserts Report

The Sydney Morning Herald reports that an investigation led by the media outlet along with Age and Australia-based 60 Minutes uncovered much of the same troubling activity at Star that damaged Crown’s reputation. For around seven years, the casino operator is said to have regularly embraced “criminal or foreign-influence” operations and had enabled “suspected money laundering, organised crime, large-scale fraud and foreign interference.” Star’s board of directors was reportedly made aware of the issues repeatedly, but didn’t do anything to intervene, according to the report.

There were recent threats that Star was going to face similar regulatory investigations like those that already cost Crown its license in New South Wales (NSW), and which could lead to it losing its licenses elsewhere in Australia. The NSW Independent Liquor & Gaming Authority (ILGA) has called on attorney Adam Bell to conduct the review and Bell knows how to uncover the dirt. He’s the same individual who led NSW’s investigation of Crown.

Drug Trafficking, Tax Cheats and Fraudsters

According to The Sydney Morning Herald, Star had a number of high-rolling VIP clients who were known to be involved in less than scrupulous activity. There was at least one alleged cocaine trafficker out of Sydney, a successful restaurant entrepreneur with a side business as a money launderer and a number of corporate fraudsters and tax cheats. The VIP group also reportedly includes Australia’s “most infamous accused foreign-interference agent.”

Some of the gamblers finding refuge in Star Sydney came from Crown Melbourne or the Star Gold Coast casino. They were allegedly banned from visiting those properties by NSW and Victorian police commissioners, but that didn’t stop them from being able to make their way to the Sydney venue, despite having been flagged for their alleged ties to organized crime.

Star Allegedly Knew What was Happening

Audit firm KPMG was brought in to conduct an audit at Star in 2018 at the operator’s request. It didn’t take long for the firm to uncover issues, telling Star in May of that year that the company was “profoundly failing to combat the risk of money laundering, terrorism financing and corruption with its Sydney and Queensland casinos.” Star’s anti-money-laundering (AML) policies allegedly had nothing to do with the guidelines established by the AML-CTF (counter-terrorism financing) Act.

Star was also found to have been more lenient with junkets than it should have been. The company asserted in August of last year that it was in compliance with regulations, but the new media report contradicts that assertion. It discovered that, from 2014 to 2018, Star accepted special Chinese debit and credit cards from some Chinese VIPs that allowed them to withdraw “hundreds of millions of dollars” from Star’s hotel properties that were, instead, linked to gambling. That was a common practice to circumvent China’s strict anti-gambling rules that prevent large sums of money from being moved out of the country.

A lot of questions still have to be answered before decisions can be made. However, the NSW gaming regulator, Liquor & Gaming NSW, is seemingly baffled by the results of the media investigation and curious why nothing has been done sooner. Philip Crawford, the organization’s chairman, said in an interview with the three media companies that he wasn’t aware of the activity at Star or of the KPMG report. He asserted, “If it is as bad as you say it is, then that’s certainly something they should have reported to us.”