Cycle of negative news
The cycle of negative news for Australian gambling firms shows no sign of letting up after casino giant The Star Entertainment’s shares fell on the back of a money laundering claim.
Leading Australian online stockbroking firm CommSec took to Twitter on October 11 to share the news that The Star’s shares had slumped by 22.9% on Monday:
The sharp downward spike follows allegations that The Star enabled money laundering, organized crime, and large-scale fraud at its casinos for years.
A joint report by three news outlets — the Sydney Morning Herald, The Age, and 60 Minutes — implicated The Star in the illegal activities. The Star’s response was to issue a statement declaring that it deems the “number of assertions within the media reports […] misleading.”
Damning body of evidence
Despite the group’s refutal of the media allegations, the Sydney Morning Herald cited a wide range of insider and material evidence exposing The Star’s alleged illegal activities. These include “internal company documents, court cases and law-enforcement intelligence briefings, as well as a dozen sources with detailed knowledge of Star’s operations,” the Herald stated.
The Star issued a statement on October 11 asserting that it “will take the appropriate steps to address all allegations with relevant state and federal regulators and authorities.” The operator is already the subject of an Australian regulatory body’s investigation into money laundering.
The Star courted high-rolling gamblers with alleged ties to organized crime
According to the media report, between 2014 and 2021 The Star courted high-rolling gamblers with alleged ties to organized crime or foreign-influence activities.
The three-way investigation by the media outlets also highlighted that the global audit firm KPMG warned The Star management in 2018 that its anti-money-washing controls were inadequate.
Mote in The Star’s eye
The Sydney-based gambling group has portrayed itself as the “cleanskin casino company” in contrast to its rival, the James Packer majority-backed Crown Resorts. Two royal commissions and a regulator’s investigation have devastated Crown’s standing, and now The Star finds itself in the spotlight for the same improper practices.
Some solace has, however, come Crown’s way, after it learned on October 11 of the extension of liquor licenses for its Crown Sydney property. The New South Wales Independent Liquor & Gaming Authority (IGLA) said that while it renewed Crown Sydney’s three liquor licenses, its position on the casino resort’s gaming operations has not changed.
a regulatory report into the beleaguered group’s suitability to operate its Melbourne casino is due October 15
In February, the IGLA deemed Crown unfit to run its casino in Sydney after an official inquiry linked it to money laundering. The ruling nixed Crown Sydney’s rights to hold a casino license. A regulatory report into the beleaguered group’s suitability to operate its Melbourne casino, meanwhile, is due on October 15.