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ASIC Takes Legal Action Against 11 Current and Former Star Entertainment Directors and Officers

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The Australian Securities and Investments Commission (ASIC) has commenced civil penalty proceedings in the Federal Court against 11 current and former directors and officers of The Star Entertainment Group Limited (Star) for alleged breaches of their duties under section 180 of the Corporations Act.

ASIC Deputy Chair Sarah Court said: “ASIC alleges that Star’s board and executives failed to give sufficient focus to the risk of money laundering and criminal associations, which are inherent in the operation of a large casino with an international customer base.”

ASIC’s case includes claims against members of the Star Board between 2017 to 2019, being John O Neill (former Chair), Matthias Bekier (former Managing Director and CEO), Kathleen Lahey, Richard Sheppard, Gerard Bradley, Sally Pitkin, Benjamin Heap and Zlatko Todorcevski.

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ASIC alleges the Board members approved the expansion of Star’s relationship with certain individuals with reported criminal links, rather than addressing money laundering risk by inquiring into whether Star should be dealing with them. ASIC also alleges that Board members, when provided with information about money laundering risks affecting Star, did not take steps to make further enquiries of management about those critical risks and that this was a breach of their director duty obligations.

ASIC further alleges that Mr Bekier and Star executives Paula Martin (former Company Secretary and Group General Counsel) and Greg Hawkins (former Chief Casino Officer) breached their duties by:

  • not adequately addressing the money laundering risks that arose from dealing with Asian gambling junket Suncity and its funder, as well as continuing to deal with them despite becoming aware of reports of criminal links; and
  • not appropriately escalating money laundering issues to the Board.

As to Ms Martin and Harry Theodore (former Chief Financial Officer), ASIC also alleges they knowingly permitted misleading statements being provided to National Australia Bank (NAB) regarding the use of debit cards issued by China Union Pay International Ltd (CUP) at NAB ATMs located on Star’s premises. Those statements disguised the fact that Star was permitting CUP cards to be used for gambling, which was prohibited by CUP. ASIC is aware over $900 million was obtained by Star customers using CUP cards in NAB ATMs from 2013 to 2019. ASIC also alleges that they, and Mr Bekier, failed to report these matters to Star’s Board.

ASIC Chair Joe Longo said the role of directors was critical to a company’s general standing and performance, including how a company deals with significant issues.

“As I’ve said on many occasions, directors and officers are a critical part of the conduct of business in Australia. Their duty is to understand the operations of the company over which they preside, and the particular risks faced by the business. They are required to bring an inquiring mind to business operations. It is not ‘set and forget.’”

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Australia

VGCCC Continues Crackdown on Underage Gambling

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Following the successful prosecution of the Peninsula Club in Dromana, Victorian Gambling and Casino Control Commission (VGCCC) CEO Annette Kimmitt AM reiterated the regulator would continue to crack down on venues that allow children to enter poker machine areas.

The Magistrates’ Court of Victoria fined Victorian Amateur Turf Club, the venue owner, $7000 for 2 breaches of the Gambling Regulation Act 2003 (Vic) and ordered it to pay VGCCC costs of $3500. No conviction was recorded.

Ms Kimmitt said: “This is a warning to every venue. The onus is on you to ensure that children cannot and do not enter the gambling area or participate in any gambling activity, even if they’re with an adult.

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“Equally, staff must be adequately trained and present in the gambling area to supervise while machines are in use.

“Research tells us that people who begin gambling at a young age are at greater risk of developing gambling problems as an adult.

“The rules exist to protect children from exposure to, and harm from, gambling.”

On 10 June 2023, a child entered the gambling area of the Peninsula Club twice and was able to use the poker machines on both occasions. During the second visit to the area, while with adults, the child used a poker machine for about 5 minutes, until staff intervened.

Magistrate Ayres considered the venue’s self-reporting, its lack of prior convictions, early plea and remediations implemented to reduce the chance of future offending.

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Australia

The Star Forced into Trading Halt After Failing to Publish Financial Results

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The Star Entertainment Group has been forced into a trading halt, after failing to publish its half-year results on Friday.

According to a company release, the halt starts on Monday, unless the group is able to lodge its periodic report by end of trading. Otherwise, the suspension will remain in effect until the report is lodged.

This appears unlikely, as the group notes that it can’t publish its 1HFY25 Report ‘unless, and until, it has secured a refinancing commitment that would enable The Star to refinance all of the Group’s existing corporate debt, as well as to provide additional liquidity’.

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According to reports, the group’s Chief Executive Steve McCann is working to secure over AU$100 million ($62 million) in short-term funding, hoping to keep the company afloat until May.

McCann is reportedly trying to access the AU$60 million ($37.3 million) garnered from the sale of the group’s Sydney events center last month, which is being held in escrow.

The funds, however, will only be released after approval from the New South Wales government.

If released, this would help McCann negotiate with lenders for the additional funding he hopes can prop up the group.

The Star has been warning for months that it has run out of cash, indicating in January that at the end of 2024 it held just AU$78 million ($48.5 million) in available cash.

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Despite owing lenders some AU$430 million ($267 million), The Star has not accepted offers both from its joint venture partners in Queen’s Wharf Brisbane (Chow Tai Fook and Far East Consortium) and by funds associated with Oaktree Capital Management.

Blackstone has indicated that it could be interested in an acquisition of The Star upon its entry into voluntary administration.

The post The Star Forced into Trading Halt After Failing to Publish Financial Results appeared first on European Gaming Industry News.

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Australia

VGCCC Concludes Underage Gambling Investigation

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“Nothing can make up for the harm a Melbourne family experienced as a result of the failure by multiple operators to prevent a young teen from gambling between May 2022 and October 2023,” Victorian Gambling and Casino Control Commission (VGCCC) CEO Annette Kimmitt AM said.

Her comment followed the conclusion of VGCCC’s most comprehensive action to date for underage gambling – more than 2000 hours of investigations, 14 prosecutions against 10 entities, 98 charges and fines totalling half-a-million dollars.

The VGCCC investigation was prompted by concerns reported by the mother of the then 17-year-old, whose neurodiversity, in addition to his age, put him at high risk of gambling harm.

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Ms Kimmitt said: “I can only imagine how difficult it was for the mother to come to us and I commend her for doing so. I hope the outcomes and conclusion of these proceedings bring her some comfort, following the significant trauma she and her family have gone through.

“When industry is not diligent about complying with its legal and social obligations, the consequences for everyday Victorians can be serious and long lasting, which is why the VGCCC is determined to hold operators to account.”

The final case was heard before the Magistrates’ Court of Victoria on Thursday 13 February. Correct Bet Pty Ltd, the operator of the Coburg TAB outlet, pleaded guilty to two charges and was fined $3000 without conviction and ordered to pay VGCCC costs of $5500.

Magistrate Hodgson considered that Correct Bet had no prior convictions in 14 years of operation across multiple venues and had implemented additional measures, including staff training, mobile phone policy changes, and regular CCTV monitoring.

Separately, on Friday 7 February, Supreme Edinburgh Pty Ltd, trading as the Duke of Edinburgh in Brunswick, pleaded guilty in the Magistrates’ Court to three counts of breaching the Gambling Regulation Act 2003. The operator was fined $2500 and ordered to pay VGCCC costs of $4950.

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Ms Kimmitt said: “It is a venue’s responsibility to ensure minors do not access a designated gambling area, let alone gamble, no matter how determined or convincing a child might be.

“We welcome the outcome of these court hearings, which bring to a close all prosecutions involving this family. Unfortunately, the family’s recovery from this experience is likely to take a lot longer and leave a painful scar.”

The post VGCCC Concludes Underage Gambling Investigation appeared first on European Gaming Industry News.

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