Star cleared to commence remediation program by independent advisor

The Star Entertainment Group has been hit with a record penalty for an Australian operator due to money laundering failures, with its licence also suspended indefinitely.

A first report from the Star Entertainment Group’s independent monitor, Allen & Overy Consulting, has suggested that the embattled group is ready to commence with its remediation program.

The company has hit a number of significant hurdles over recent months, including being deemed unsuitable to hold casino licences in the Australian states of New South Wales and Queensland.

However, in its assessment, A&O noted: “Based on this fieldwork, in our opinion the program is sufficiently developed for the TSEG board to consider commencing the execution phase”.

Last week also saw NSW’s Independent Casino Commission suspend the group’s licence as well as hit the company with a record $100m fine. 

Furthermore, Wexted Advisors’ Nicholas Weeks, formerly of  Crown Resorts and NRL, has been named as manager of Star Sydney until matters can be rectified and it is deemed likely that The Star can achieve suitability.

Despite having not yet interviewed new CEO Robert Cooke, A&O, which undertook a review of 46 documents and the observation of 12 hours of planning meetings and interviews with 20 employees across different workstreams, has found the group suitable to proceed.

“While we haven’t yet had an opportunity to interview the incoming CEO, we have, in the course of preparing this report, engaged with a number of TSEG’s senior leaders including the Interim Chair of the Board (Ben Heap),” the report continued. 

“On the basis of these conversations, and reflecting on the scale of TSEG’s investment and the degree of senior focus being shown, we believe TSEG recognises the degree of challenge it faces in remediating the root causes and restoring trust, and has shown an intention to do so.”

However, it did suggested that a number of questions are still left unanswered, with A&O highlighting that executive level performance has not been updated to reflect the remediation program. It was also said that a post-implementation phase must also be established to ensure accountability and sustainability.

“In our view, these enquiries do not preclude TSEG from moving into execution phase. Instead, they should inform the iteration of planning documents to ensure the program delivers sustainable change,” A&O added. 

“We will monitor developments closely in this respect, including by seeking input from the newly appointed Manager of The Star Sydney, as well as any other person(s) that may be appointed to a similar manager role in relation to The Star Gold Coast and Treasury Brisbane.” 

Program planning documents show that the group anticipates program design and implementation to be complete by 30 September 2024, with post implementation assurance work expected to continue into 2025 and beyond.