Adam Roarty Editor
Adam Roarty is a journalist covering sports betting, regulation, and industry innovation for CasinoBeats. His coverage includes tax increases in the UK, covering breaking stories in the ever-evolving landscape of US betting such as the...
Read Full BioThe former CEO of Star Entertainment, Matthias Bekier, is facing a fine of millions of dollars after a judge ruled he breached his director’s duties by allowing a Chinese junket to launder money at the group’s casinos.
In addition to Bekier, Justice Michael Lee ruled that Star’s former lawyer, Paula Martin, was also guilty, but seven others escaped punishment.
Lee said the company had been operating dysfunctionally and unethically under senior management. Between them, Bekier and Martin had seven breaches of directors’ duties. Each breach carries a maximum penalty of just over AU$1 million (around $700,000).
The Australian Securities and Investments Commission (ASIC) brought the case against Star executives in 2022. Originally, 11 former employees faced charges, but the chief casino officer, Gregory Hawkins, and CFO, Harry Theodore, admitted their wrongdoing. As a result, Hawkins paid an AU$180,000 fine, and Theodore paid AU$60,000.
The trial against the other nine individuals began in February last year and culminated in Thursday’s judgment.
Unimpressive Witnesses
Bekier and Martin appeared in court to defend their positions, arguing that their actions relied on other members of staff alerting them to risks of money laundering. Justice Lee said Martin was an “unimpressive witness,” while also criticizing Bekier for being evasive when questioned.
Meanwhile, Lee declined to punish seven other Star board members: John O’Neill, Richard Sheppard, Katie Lahey, Gerard Bradley, Sally Pitkin, Ben Heap, and Zlatko Todorcevski. He said that ASIC failed to show the non-executive directors were implicated in the scandal.
While Bekier and Martin both took the stand in defence of the charges, none of the others appeared as witnesses. Lee said this move may well have been instrumental in saving them from punishment.
He wrote, “As it turned out, the forensic choice open to them of not entering the witness box has been vindicated,” as reported by the Australian Financial Review.
Lee noted that there was insufficient evidence that they had knowingly allowed money laundering, as ASIC had been unable to provide any recordings of conversations it claimed had taken place in the boardroom.
In addition, the board was often given “oppressive” information by Star’s management, which often ran into hundreds of pages. This made it impossible for the board members to go through all the information and identify risks.
ASIC Chairman Joe Longo said the regulator was considering an appeal but warned it would not be dissuaded from bringing further cases against directors.
Longo stated, “The court found that senior executives have a critical responsibility to identify serious risks, ensure those risks are properly managed, and escalate them to the board.”
Chinese Junket Given Private Gambling Room
The scandal dates back to 2018, when it is alleged that the Star’s management entered into an agreement with Chinese junket Suncity. Management provided Suncity exclusive access to a private gaming room in the Star’s Sydney casino, known as Salon 95.
Bags of notes were allegedly tied together with rubber bands and delivered in blue esky bags to the service desk, where junket staff hid themselves from CCTV cameras underneath blankets.
Suncity was one of Macau’s largest junket operators, catering to high-roller gamblers in China. The group’s founder, Alvin Chau, was sentenced to 18 years in prison in Macau for organised crime, gambling, and fraud offences. A further eight members of the company were also given prison sentences ranging from nine to 15 years.
In addition, they were ordered to pay HK$6.5 billion ($830 million) in fines to the government, plus compensation to five of Macau’s six casino concessionaires, totaling some HK$2 billion.
Following the conviction, the junket sector in Macau sharply contracted amid regulatory crackdowns and the industry’s collapse.
In addition to The Star, fellow Australian casino operator Crown Resorts agreed to end any associations with international junkets in 2021.
