Sydney Casino Dodging Shutdown Shows Industry Is Too Big to Fail Star’s troubled flagship casino to stay open under supervision Regulator says thousands of staff would have lost their jobs The Star complex in Sydney.Photographer: Brent Lewin/Bloomberg By Angus Whitley and Keira Wright 17 October 2022 https://www.bloomberg.com/news/arti...industry-is-too-big-to-fail?srnd=premium-asia Star Entertainment Group Ltd.’s flagship Sydney casino escaped shutdown in the face of a damning regulatory report that found it faked documents, misled authorities and ignored money-laundering risks. The report’s revelations mean Star’s waterfront casino isn’t fit to hold a gaming license, the New South Wales state regulator said Monday. Even so, the casino will keep operating under a “suspended” license with a government-appointed manager while it attempts to address its shortcomings. Philip Crawford, who leads the NSW gaming watchdog, told reporters it wasn’t in the public interest for thousands of Star employees to lose their jobs. He fined Star A$100 million ($62 million), less than 5% of pre-pandemic group revenue. “It’s quite remarkable how much they’ve got away with,” said Charles Livingstone, associate professor at Monash University’s school of public health in Melbourne. “I just can’t see what they’ve done that doesn’t warrant a proper penalty.” The verdict means every casino in Australia run by the country’s two largest operators has been found unfit to hold its license in the past two years. None has been shut. The decision to allow Star to remain open in Sydney raises fresh questions about authorities’ tolerance of wrongdoing at companies that are significant employers and major tax contributors to state government coffers. A report for the watchdog released last month found Star’s Sydney casino had inadequate anti-money laundering controls, allowed patrons to flout China’s capital controls and encouraged problem gamblers. Star misled the regulator and allowed a Macau-based junket operator to run a prohibited money-for-chips desk at its Sydney casino. Star shares rose as much as 2.3% in Sydney trading after they were halted for the regulator’s announcement. The stock traded up 1.7% at 3:27 p.m., valuing the company at A$2.5 billion. The company was earlier this month found unfit to run its two casinos in Queensland, where it faces potential fines, the loss or suspension of its license, or the appointment of a special manager. Crawford’s NSW Independent Casino Commission was given oversight of gaming in the state last month. “There is simply no appetite for further misconduct,” he said at the time. On Monday, Crawford denied Star was too big to fail, a term for an organization so large that its collapse would have intolerable economic consequences, no matter what it might have done. “That’s not the right way to put it,” he said. “We balanced these competing interests to come up with the best solution for the public interest.” He said the regulator wouldn’t “shy away from” a stiffer penalty if it was appropriate. ‘Fundamentally Broken’ “There seems to be big resistance to actually firmly shutting the doors,” said Alex Simpson, a senior lecturer in criminology at Macquarie University in Sydney. Australia’s casino sector is “fundamentally broken.” The country’s gaming industry started to unravel in February 2021, when Crown Resorts Ltd. -- at the time backed by billionaire James Packer -- was judged unfit to hold a gaming license in Sydney. That decision came after an inquiry uncovered wide-ranging governance failings and poor anti-money laundering controls. The Sydney verdict set off a cascade of probes into Crown’s other casinos, and a spate of similar findings. Blackstone Inc. has since bought Crown. Crawford’s imposition on Star in Sydney today mirrors one placed on Crown in Melbourne late last year. An inquiry led by a former judge found Crown was unsuitable to run its Melbourne casino and had underpaid taxes, facilitated money laundering and exploited problem gamblers. A government-appointed manager was installed for two years to oversee Crown’s efforts at reform. At Star, the government-appointed manager, Nicholas Weeks, will be “basically the person controlling the license,” Crawford said. He’ll oversee the casino for as long as 90 days, with scope to extend the period if necessary. There’s no guarantee Star will become suitable to hold the license, though “there is a possibility” it can undertake the necessary reforms, Crawford said. He said there are signs that incoming Star Chief Executive Officer Robbie Cook is “absolutely capable” of providing the necessary leadership and that interim Chairman Ben Heap wants to work transparently with the regulator.
%% LOL\NO business is too big to fail. Good thing for me i dont believe everything i read Gov oversight; what could possibly go wrong??
It's been two years and the situation hasn't changed much. However, there is nothing to be surprised about.