Star Report under fire for its selective and incomplete disclosure

As , The Star is currently not in a position to hold a casino licence. The 67-page assessment of Star’s suitability to hold a casino licence in the state, has been seen by The Australian. It includes responses from Star and has been kept under wraps until now, with even key NSW government members yet to see its contents or the concerns raised by The Star about the assessment. The confidential closing submissions of the Bell inquiry indicate that it might take up to five years for The Star to re-establish its suitability A second full-scale inquiry into Star ordered by the NICC (NSW Independent Casino Commission) ultimately led to another clean-out of the board. The Bell Two inquiry was overseen by Adam Bell, the same senior counsel who presided over the initial inquiry into Star in early 2022. Mr. Bell is scheduled to deliver his recommendations to the NICC this week. The inquiry’s lead counsel, Caspar Conde recommended the retention of Mr. Weeks in his $1.8 million-a-year role as manager of the casino in Sydney and special manager of the Brisbane and Gold Coast property, stating that “continued oversight, scrutiny, guidance, and reporting to casino regulators is required”. The report that has been at the heart of Star Entertainment’s struggle with the NSW regulator has been criticized by the casino’s board for being unbalanced, error-ridden, “selective” and “incomplete”. This confidential report, penned by Star’s controversial independent manager Nick Weeks (above right in photo), last October, set off a series of events leading to a huge clash with the NSW Independent Casino Commissioner, Philip Crawford. The Australian has also seen a confidential letter dated 1 February where the regulator severed communication with The Star over issues with CEO Cooke. Mr. Crawford then declined Star’s attempts to discuss the report and find a resolution to the deadlock.

Weeks criticised

Just two weeks later, Crawford’s NICC shocked Star, the NSW government, the Queensland government, and investors by launching another full-scale inquiry into the casino. Cooke resigned shortly after, stating it was in the best interests of the company. Former Crown CEO Steve McCann has since taken charge. The original Weeks report criticized several areas of Star’s reform efforts under Cooke, including governance, leadership, capability, and organizational structure. It accused the casino operator of deferring work on rebuilding its governance “in favour of alternative priorities”. The investigation discovered that the casino’s involvement in international junket trade had potentially made it vulnerable to money laundering and criminal associations. However, an angered Cooke and Star board responded to the Weeks report, fearing that the NICC’s or Queensland’s decisions about the fate of its casino license would not be made “on the basis of complete and accurate facts, taking into account all relevant matters”. Star also criticized the NICC’s refusal to endorse a critical remediation plan “for reasons that are not apparent”, which had been hindering the casino’s new management team’s ability to overhaul the culture. Star says the Weeks report ignored nearly 50 major safer gaming reforms the casino’s management had introduced within 12 months. Through 2022 and 2023, Star faced challenges such as legal action from the financial crimes regulator Austrac; it was hit with a higher casino tax, and undertook two capital raisings needed to ensure its financial survival. Star said it “strongly disagreed” with the assertion that it took the eye off the ball on reform. The path to regain trust and suitability could take up to five years, according to the submission. This confidential report contains five key recommendations and is expected to significantly influence the outcome of the inquiry. However, it does not represent the final recommendations of the inquiry head, Adam Bell SC.behaviour that had allowed the casino to be used by organised crime. The submission suggests that the Star board should have acted more quickly in dismissing Cooke after the NICC privately declared in December that it had lost confidence in the CEO. It also claims that Foster and Cooke knew that Star’s 67-page response to a highly critical report prepared by Weeks would be controversial.

Origins and findings of Bell Report

The Bell Report, an in-depth examination of The Star Pty Ltd, was launched to evaluate the company’s eligibility for a casino licence and its adherence to legal responsibilities. This review was initiated under specific sections of the Casino Control Act 1992 (NSW) and began in November 2021. Adam Bell SC was appointed by the NICC to conduct this independent investigation. Initially planned for 15 weeks, the inquiry started on 19 February 2024, with Mr Bell’s report scheduled for submission to the NICC on 31 May. However, Mr Bell informed the NICC on 20 March that it would be in the public interest to conduct most of the hearings publicly. As a result, the deadline for the final report was extended to 31 July 2024. The inquiry was initiated to assist the NICC in determining the next course of action as it considered whether Star was prepared to regain its licence, which had been suspended in October 2022. The tenure of the Star Manager, Mr Weeks, was extended from 30 June to 30 September 2024 by regulation to accommodate the extended inquiry and allow the NICC time to review Mr Bell SC’s report.

The Bell Review identified serious misconduct and compliance failures, including misleading and deceptive conduct and a corporate culture that did not meet expectations. Despite these findings, the review did not identify any wrongdoing by key executives or any of Star’s directors.

The Bell Review has provided significant insights for the casino industry and regulatory bodies on the importance of internal controls, transparency, and a culture of compliance.

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