Saturday, September 24, 2022
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Senior Government Minister Questions Future of Casinos in NSW

Cities and Infrastructure minister of New South Wales Rob Stokes has questioned the future of the casino industry in Sydney and Australia following the damaging revelations of criminal practices, including money laundering, and collaborating with Asian junket operators despite advice not to, by investigators into Crown Resorts and Star Entertainment Group.

Casino Shortcomings Bring into Question Their Very Existence
Stokes asked members of the parliament to rethink the future of casinos in the state given the findings of investigations into Crown Resorts and Star Entertainment. He commented that the public inquiries into both companies would have a serious impact on the regulatory conditions for the casino operators and a number of consequences that could question the need for a casino industry in NSW.

His concerns came after Slater and Gordon, an Australian law firm, filed a shareholder class-action lawsuit before the Supreme Court of Victoria, accusing Star of misleading its investors and making deceptive representations about its compliance with regulatory obligations.

The lawsuit is a result of a public hearing initiated by the NSW Independent Liquor & Gaming Authority (ILGA) into Star’s suitability to hold its casino license in Sydney. The probe was launched due to media reports alleging that Star and Crown maintained relationships with Asian junkets, including Suncity Group.

Suncity Group founder and CEO Alvin Chau was arrested in 2021 and relinquished control of the company from a prison cell in Macau, impacting the company’s recent finances. During the ILGA inquiry, it became known that Star Sydney and Suncity Group continued to operate together even after the companies publicly “severed ties” in 2019. Investigators found out that the casino allowed Suncity to operate out of an unbranded room in the Star Sydney.

The Sydney Morning Herald, The Age, and 60 Minutes accused Star of money laundering, fraudulent practices, and criminal infiltration. During the inquiry into Star, it was revealed that the company had hidden Chinese credit card gambling transactions worth AU$ 900 million ($676.31 million) as hotel expenses and provided false information to banks to hide the fraudulent scheme.

Matt Bekier, managing director and chief executive officer of Star, resigned from his position because of the public inquiry and damning revelations.

“Cesspits of Dishonesty, Tax Evasion and Money Laundering”
Stokes stated that the benefits of casinos were “illusory and ephemeral” and called them “veritable cesspits of dishonesty, tax evasion, junkets, money laundering”. He added that given the tax evasion findings, casino operators are not justified because of ”the revenue they provide to support social and community benefits”. He admitted that everything the government had been warned about was true.

In addition, more than 200 people reported suspicious gambling transactions at pubs and clubs in the NSW state within the last six months. As a result, the government was pressured to introduce reforms in the gambling sector. Kevin Anderson, a minister for hospitality and racing reported that the NSW government planned to establish an independent casino regulator by the middle of this year with new legislation.

In February 2021 the NSW gaming regulator found Crown unsuitable to hold a casino license due to allegations of money laundering in the company’s casinos and a breach of its NSW license terms by consenting to sell 19.99% of Crown’s shares to Melco Resorts & Entertainment, a Macau-based operator.

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