High-rollers abandon The Star as it braces for second inquiry

The Star Entertainment Group, an Australian casino operator, is currently facing a significant challenge as high-rolling patrons have started to avoid its three casinos in Sydney, Gold Coast, and Brisbane. This trend comes as the company's former and current senior executives are set to appear before a public inquiry.

The New South Wales (NSW) Independent Liquor & Gaming Authority announced on March 15, 2023, that an investigation would be launched into allegations of money laundering, organised crime links, and VIP junket operations at The Star's Sydney casino. This inquiry follows an earlier investigation that was initiated in 2021 but was suspended due to insufficient evidence.

The latest inquiry is expected to focus on the casino's dealings with junket operators, who bring high-rolling gamblers from China and other countries to Australian casinos. Junket operators typically extend credit to these gamblers, allowing them to gamble beyond their means, and take a percentage of their winnings as commission.

The Star's former CEO, Matt Bekink, and its current CEO, Robert Casey, are among the executives who have been summoned to appear before the inquiry. Both executives have denied any wrongdoing and have expressed their commitment to cooperating fully with the investigation.

The allegations against The Star come at a time when the casino industry is under increased scrutiny due to concerns about money laundering, organized crime, and foreign interference. In response to these concerns, several Australian states have introduced new regulations aimed at strengthening oversight and transparency in the casino industry.

The absence of high-rolling patrons at The Star's casinos is likely to have a significant impact on the company's revenue. According to a report by the Australian Financial Review, high rollers accounted for around 20% of The Star's revenue before the pandemic. With these patrons staying away, the company is likely to experience a significant decline in revenue during the investigation.

The Star is not the only casino operator facing challenges in this regard. Crown Resorts, another major Australian casino operator, is currently undergoing a major overhaul following an investigation that uncovered widespread money laundering and links to organized crime. Crown has been forced to sell its international assets and is undergoing a significant restructuring to address these issues.

In conclusion, The Star Entertainment Group is facing a significant challenge as high-rolling patrons avoid its casinos due to an ongoing investigation into money laundering, organised crime links, and VIP junket operations. The company's former and current senior executives, including its CEOs, have been summoned to appear before the investigation. This comes at a time when the casino industry is under increased scrutiny due to concerns about money laundering, organized crime, and foreign interference. The absence of high rollers is likely to have a significant impact on The Star's revenue during this period.