Bell Two: Star Sydney receives fine but retains licence for the time being

The NSW Independent Casino Commission (NICC) fined The Star Sydney and imposed multiple new regulations following months of investigation into the Bell Two inquiry. The decision was announced on Thursday, 17 October. That being said, its casino licensing is intact—for the time being, anyway.

It was announced in a press statement by the NICC that Star will be fined AU$15 million, which is equivalent to $10 million, £7.7 million, or €9.2 million. Starting in February, the investigation will lead to "a suite of directions and licence conditions" that it must adhere to.

Shortly following the announcement, trading in Star stock on the ASX came to a halt. After failing to announce quarterly results, the company's shares reportedly fell 40% in a single day in September, as reported by Capitol Brief. After a year at $0.595 cents, the stock has dropped to $0.255, marking the second trading stop in as many months.

After reviewing the study, Star plans to issue a statement.

Over the past two years, both penalties have almost remained unchanged for Star. However, the primary concern was over whether the authority would totally cancel the casino's licensing. The state-appointed manager Nick Weeks will instead be in control until at least March 31, 2025, because it did not. Weeks' tenure was extended to that date in August, so that timeframe is not surprising.

Star may not be completely safe from legal trouble just yet, even though the verdict is in their favour. After Weeks' extension ends, the NICC will "reassess The Star’s suitability to regain its casino licence," suggesting that the verdict is not final.

"The Bell Report demonstrated how quickly weak controls can lead to criminal infiltration and gambling harm in a casino setting and compliance breaches can have serious consequences for the community," stated Phillip Crawford, chief commissioner of the NICC, in the publication. We will continue to closely monitor The Star's progress in proving it is capable of recovering its casino licence. The NICC appreciates the tremendous problems The Star is facing.

Bell's proposals to be implemented by NICC
The commission announced other additional restrictions to follow the probe, including the fine. The report suggestions put forth by Adam Bell SC on July 31st are mainly reflected here.

From this month forward until March, Star must comply with "additional financial and operational reporting" obligations. Additionally, the state's Casino Control Act (CCA) will be revised to include additional regulations, and there will be "more prescriptive requirements around board constitution and key management personnel" to contend with.

The inquiry has now been made public, and it thoroughly emphasised the latter two flaws. According to Bell, the majority of Star's leadership was located in the groups rather than the casinos. He claimed that Star Sydney's lack of an adequate board is a contributing factor to the company's problems.

It is likely a reference to patron probity checks, even if the NICC did not specify the exact way the CCA will be altered. The inability of Star to properly verify the wealth of almost 25,000 customers was one of the infractions detailed in the study.

McCann's influence is already significant
Recruiting Steve McCann was not among Star's many bad choices in the last many years. In June, McCann succeeded Robbie Cooke as CEO of Star. The investigation led to Cooke's and previous chairman David Foster's departure from the corporation.

McCann is a highly regarded figure in Australia, having formerly held the position of CEO at Star's competitor, Crown Resorts. In 2022, he finally oversaw the sale of that company to Blackstone Group. Once McCann joined Star, in September, he helped the company's lenders finalise a fresh $200 million financing deal. He has batted down merger and acquisition rumours, claiming that the time is not yet right for such discussions.

According to Bell's report, McCann's presence was described as "to be welcomed," and Thursday, those same emotions were echoed.

According to Crawford, the relationship between the company and the regulator has significantly improved since Star CEO Steve McCann instituted open channels of communication and collaboration with the NICC.

"But there's still a long way to go before The Star can be considered a licence-worthy operator who has been diligent and cooperative."

Is this Star's moment of truth?
The Star Sydney community is holding out hope that the NICC's decision will mark a new beginning for the city. After two investigations, both led by Bell, the casino has managed to stay afloat.

After receiving the first in September 2022, Star went into a tailspin from which it has never fully recovered. Countless executives have left, the company has paid millions in fines, and its expectations have been drastically curtailed.

Everything seemed to be going according to plan prior to the release of Bell Two. Falsified RG paperwork and a defective cash-out machine that was duped thousands of times were among the many infractions uncovered during public hearings held throughout the spring. In addition, the "us versus them" mentality and antagonistic internal culture were depicted in Bell's report.

According to Crawford, there are still many problems with governance, regulatory compliance, technology, and risk management, even though the first probe found less misbehaviour. This includes areas where The Star said it had fixed problems.

Notwithstanding this, a way has opened up for the casino to be suitable again. Star now has a chance to follow in Crown's footsteps and reclaim its licenses in Victoria and New South Wales.