Star Entertainment hit with $15 million but clings on to crucial Sydney licence

Beleaguered Star Entertainment has been slapped with a $15 million fine and the licence for its flagship Sydney casino licence will stay suspended as the company grapples with ongoing compliance failures.

Australian Securities Exchange-listed Star will have until June 2025 to pay the fine imposed by the NSW Independent Casino Commission, which said a second inquiry into the company had identified “continuing compliance failures and operations”.

Star can continue to operate but under the supervision of a representative from the commission until March 2025, by which time the group will need to prove it has done enough to get its licence back.

“Despite more prescriptive supervision that prevented the type of misconduct seen in the first inquiry, numerous shortcomings in governance, regulatory compliance, technology and risk management remain, including in areas that The Star claimed it had remediated,” NICC chief commissioner Philip Crawford said on Thursday.

“Reform in the systems, policies, processes and culture that support these areas cannot be understated in a business as complex as The Star’s.”

The market reacted positively to the news, with shares in Star up more than 13.7 per cent to 29¢ by market close. The stock is down about 45 per cent since the start of the year.

The penalty handed down by the NICC comes after a 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.

Amid the regulatory scrutiny, a $100 million fine in 2022, and with fewer high rollers coming through its doors, Star has struggled financially, reporting a $1.7 billion loss for the 2023/2024 financial year, including a $1.4 billion writedown on its three casinos.

Mr Crawford said the commission “understands the many challenges The Star is facing and will continue to closely monitor The Star’s progress in proving it is capable of regaining its casino licence.”

The company will also be held to tougher financial and operational reporting standards through to March 2025 and its suspended licence will have strict rules on its board and management.

Star — led by new chief executive Steve McCann, who replaced Robbie Cook — acknowledged the findings in a statement to the ASX, saying it would “continue to engage constructively” with the regulator and work towards fixings its operational problems.

Mr Crawford said the new CEO had “established open lines of communication and co-operation with the NICC which has resulted in a much healthier relationship between the company and the regulator.

“The NICC is encouraged by the steps initiated since Mr McCann’s appointment,” he said.

“However, more work needs to be done before The Star can be regarded as a compliant and responsible operator, deserving of a licence.”

Star owns The Star Sydney, The Star Gold Coast and Treasury Brisbane.