After the Star Entertainment Group requested that its shares be temporarily halted on the Australian Securities Exchange, the New South Wales Independent Casino Commission confirmed the second investigation.
Adam Bell, SC (who famously conducted the Bell Report) has been named to lead the Bell Two inquiry. The inquiry will begin today, 19 February and last 15 weeks. The final report deadline is May 31, 2024.
Philip Crawford, the chief commissioner of NICC, stated that the second Bell report will examine the ways in which Star has tried to implement the initial Bell recommendations.
He said that Bell Two would bring back the Bell Report and The Star’s attempts to gain its casino license in the shadow of the report. The Star has a lot at stake, and the NICC gives the casino as many chances as possible to prove that it is capable of achieving suitability.
The NICC will have the necessary information to take a decision that is important for The Star and its staff, stakeholders, as well as the community at large.
What topics will Bell Two be covering?
Star released a press release today confirming that they had received information about the Bell Report.
The second investigation will also examine the impact of the Bell Report, including the risk management culture, Star’s reporting and management lines, and the management structure. The second inquiry will examine the culture at Star, including its management and reporting lines as well as risk management.
Adam Bell SC’s initial report detailed anti-money laundering failures and social responsibilities at The Star Sydney dating back many years. One year after the Bell Report, the Star Sydney casino was found to have implemented 22 out of the 30 recommendations.
Star is currently working to restore its reputation in NSW. In September 2022, it was found unsuitable for a state casino license.
Star faces similar sanctions in Queensland as well as the possibility of an AUSTRAC fine and four class action lawsuits. The majority of them are related to Chinese junket operators.
Trading halt
Star stated that the request for an immediate halt to trading was a response to a contact received today by the NICC. The operator provided no further details about the inquiry at the time this statement was made.
The company requested that trading be halted until further information about the investigation is released, or by 21st February, whichever date comes first.
Star says it anticipates that the ASX will grant the request for a trading halt.
Star signs job guarantee agreement in NSW
The NICC contacted Star just days after the company signed a deal to guarantee jobs in the state. The binding agreement, which was reached last week requires Star to keep a certain number of employees at its Sydney operation.
Star Casino Sydney will begin testing cashless play and playing with cards under the same agreement as Daniel Mookhey NSW Treasurer. The trial is the precursor of reforms that will be implemented in NSW later this year.
Star secured casino duty concessions with NSW in August of last year. Since then, it has worked on a plan of transition to stabilize the operations at its Sydney Casino and limit further reductions.
Financial performance
Star’s results have been affected by regulatory action, which is understandable. Last August, Star announced a full-year loss of AU$2.4bn (PS1.24bn/EUR1.46bn/US$1.57bn).
Star reported $2.8bn in outgoings that were labelled as “significant items”. The fines that the operator received were the cause of these outgoings.
A non-cash loss of $2.2bn was recorded for Sydney, Gold Coast, and Treasury Brisbane property and goodwill assets. Also, regulatory and legal expenses totaled $595m. Debt restructuring costs were $54m. And redundancy cost was $16m.
These costs, minus a growing and positive EBITDA (AU$317m), resulted in an after-tax loss of AU$2.4bn.
