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

The Star Entertainment Group, an Australian casino operator, is currently facing a significant decline in high-roller business as senior executives prepare for a second public inquiry into the company's operations. The first inquiry was launched in 2019 following allegations of money laundering and other illegal activities at The Star's Sydney casino.

The first inquiry, led by New South Wales (NSW) Independent Liquor & Gaming Authority (ILGA), resulted in a number of findings against The Star, including failure to properly monitor and report suspicious transactions, inadequate compliance with anti-money laundering laws, and insufficient checks on foreign VIP gamblers.

Following these findings, The Star's CEO Matt Bekink resigned in February 2021, and several other senior executives have since left the company. The NSW government then announced a second inquiry, which is expected to focus on the implementation of the recommendations from the first inquiry and any potential ongoing issues with money laundering and other illegal activities at The Star's casinos.

The second inquiry is being led by NSW's Independent Commission Against Corruption (ICAC), and is expected to begin in late 2021 or early 2022. The ICAC has the power to compel witnesses to give evidence and has a broader scope than the ILGA inquiry, which focused specifically on The Star's compliance with liquor and gaming laws.

As a result of these investigations and the negative publicity surrounding them, high-rollers have reportedly been avoiding The Star's casinos in Sydney, Gold Coast, and Brisbane. According to industry sources, some high rollers have shifted their business to competitors such as Crown Resorts and The Star's main rival, Crown Perth.

The decline in high-roller business is significant because these customers generate a large portion of revenue for casinos. In the 2019-20 financial year, high rollers accounted for around 20% of The Star's revenue. The loss of this business could have a significant impact on The Star's financial performance and reputation.

The Star has acknowledged the impact of the investigations on its business and has stated that it is taking steps to address the issues identified by the first inquiry. These steps include hiring additional staff to focus on compliance and implementing new systems and processes to improve monitoring and reporting of suspicious transactions. However, the outcome of the second inquiry and any potential penalties or sanctions could have a further impact on The Star's business and reputation.