Hold or fold? Star Entertainment casino’s future hangs in the balance after ‘falling short’ in second inquiry

The future of embattled Star Entertainment Group hangs in the balance as a damning NSW inquiry finds the gambling company still unsuitable to hold a casino licence.

The listed owner of The Star Sydney, The Star Gold Coast and Treasury Brisbane locked its shares in a trading halt on Friday after receiving the final report concluding a 2024 inquiry into allegations of systematic failings across the business.

It’s the second report on Star by Adam Bell SC, with the first finding The Star unsuitable to hold a casino licence because of serious regulatory failures in anti-money laundering and counter terrorism protections.

The casino has continued to operate with an appointed manager.

A second report tabled Friday revealed that transparency into operations had improved under new management, and that there had been “an improved risk management culture.”

But it ultimately deemed that Star was “falling short of what is required from a suitable casino operator.”

The NSW Independent Casino Commission will consider the findings to decide what happens next for The Star though chief commissioner Philip Crawford noted it was “unclear whether The Star could feasibly operate under less supervision, when it was exhibiting past behaviours with its licence still suspended”.

Mr Crawford said the findings also “revealed a company that had not moved quickly enough to address the governance and cultural concerns raised in the first Bell Report”.

“It has only very recently turned its attention to dealing with challenges that should have been prioritised earlier,” he said. Star, which had been due to deliver its financial result for the year on Friday, is now working through the implications of the report.

The company also said it intends to “respond to matters raised in media articles ... referring to its financial and liquidity position”.

The Australian Financial Review claimed on Thursday there would be a $1.4 billion impairment booked for the year but has not been confirmed.

In June, Star recruited former Crown Resorts and Lendlease boss Steve McCann to steer the group through its hopeful rehabilitation.

Prior to Star, Mr McCann was installed as CEO of Crown in May 2021 on a bonus-laden $2.5m annual pay-packet following a boardroom clean out as the Melbourne and Perth casino operator grappled with damaging public probes.

The incoming CEO was to receive a $2.5m cash bonus when he started on July 8.

Mr McCann will pocket at least $7.5m even if Star flounders in its fight to keep continue operating its flagship Sydney casino

“The Bell Report notes that Mr Steve McCann (Group CEO), Ms Janelle Campbell (Sydney CEO) and Ms Jeannie Mok (Group Chief Operating Officer,) bring important experience and expertise to the process of engagement with regulators, remediation and cultural transformation which will be vital if the NICC decides that The Star should remain as the operator of The Star Casino,” Mr Crawford said of the new hires.

Prior to the trading halt, Star shares last changed hands at 45¢ and are down more than 15 per cent since January.