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

The Star Entertainment Group, an Australian casino operator, is currently facing a significant downturn in business from high-rolling clients, following the announcement of a second public inquiry into its operations. The first inquiry was launched in 2019 by the New South Wales (NSW) Independent Liquor & Gaming Authority (ILGA) in response to allegations of money laundering and other illegal activities at The Star's Sydney casino.

The second inquiry, which was announced in March 2023, is being led by NSW's Independent Commission Against Corruption (ICAC). It will focus on the relationship between The Star and its VIP clients, particularly those from China, and whether any illegal activities or breaches of regulatory requirements have occurred.

The high-rollers, who are typically big spenders at casinos, have been avoiding The Star's casinos in Sydney, Gold Coast, and Brisbane since the first inquiry was announced. According to reports, some high rollers have shifted their business to other casinos in Australia and overseas, such as Crown Resorts in Melbourne and Singapore's Marina Bay Sands.

The Star's revenue from VIP gaming has been declining since 2019, with a significant drop reported in the 2022 financial year. In the first half of 2022, VIP revenue was down by 60% compared to the same period in 2019. The company's overall revenue also declined by 23% in the same period.

The Star's former CEO, Matt Bekink, and its current CEO, Matt Savage, are among the executives who will appear before the ICAC inquiry. They will be questioned about their knowledge of any illegal activities or breaches of regulatory requirements related to VIP gaming at The Star's casinos.

The ICAC inquiry is expected to last several months and will examine documents, emails, and other evidence related to The Star's dealings with VIP clients. It will also look into the role of intermediaries or "junket operators" who bring high rollers to casinos and facilitate their gambling activities.

The Star has cooperated with both inquiries and has stated that it is committed to upholding the highest standards of integrity and compliance with all applicable laws and regulations. However, the ongoing investigations have damaged its reputation and have led to a loss of business from high rollers.

The outcome of the ICAC inquiry is uncertain, but it could result in fines, sanctions, or other penalties if any wrongdoing is found. It could also lead to changes in regulations governing casino operations in NSW and other Australian jurisdictions.

In the meantime, The Star is focusing on diversifying its revenue streams and expanding its non-gaming offerings, such as hotels, restaurants, and entertainment venues, to attract a broader customer base. It is also investing in technology to enhance its gaming offerings and improve customer experience.

Despite these efforts, however, it is likely that The Star will continue to face challenges in the short term due to the ongoing investigations and the loss of business from high rollers. The outcome of the ICAC inquiry will be closely watched by the casino industry and regulators both in Australia and overseas.