AUSTRALIAN CASINO REGULATION
effect at 9:00am (AEST) on 21 October 2022. The Star Sydney casino will remain open during the period of the licence suspension; however, the NICC has appointed Mr Nicholas Weeks as the Manager to oversee the operation of the casino (including making any decisions relevant to the management and operation of the casino) until 19 January 2024 (however, the NICC has the power to re-appoint the Manager on an ongoing basis, until it has determined that The Star Sydney is able to demonstrate suitability). The NICC has also imposed a fine of AU$100 million on The Star Sydney for failing to stem criminal activity and money laundering (which is the maximum penalty that may be imposed under New South Wales casino legislation). Queensland: The Queensland Attorney-General determined that various entities in The Star corporate group are not suitable to be associated or connected with the management and operation of a hotel-casino complex or hotel, by reason of it not being a person of good repute. Accordingly, the Attorney-General: • appointed Mr Nicholas Weeks (the Manager of The Star Sydney) as the Special Manager for both The Star Gold Coast and the Treasury Brisbane; and • directed that the casino licences of each of The Star Gold Coast casino and Treasury Brisbane casino are to be suspended for a period of 90 days on a deferred basis with effect from 1 December 2023. It has been announced that a deferred commencement date for the licence suspension was provided to allow The Star corporate group entities an opportunity to remediate its management and operations and return to a position of suitability. In other words, if The Star (and the relevant The Star group entities that hold Queensland casino licences) makes suitable progress, the Queensland Attorney-General may determine to postpone or rescind the suspension of the casino licences. Additionally, the Queensland gambling regulator, the Queensland Office of Liquor and Gambling Regulation (QOLGR), imposed various fines totalling AU$100 million on the following entities of The Star corporate group: • The Star Entertainment Qld Custodian Pty Ltd - AU$30 million (payable by 31 March 2023); and • The Star Entertainment Qld Limited - $30 million (payable by 30 June 2023) and AU$40 million (payable
by 31 December 2023).
The action of the New South Wales regulator in suspending the casino licence held by The Star Sydney is unprecedented. To date, there has not been any instance in Australia of regulatory intervention in a manner where a gambling operator has been subject to external independent control. Indeed, the determinations by each of the New South Wales regulator and the Queensland Government that The Star’s casino licences should be suspended indicates that Australian gambling regulators are prepared to impose stricter disciplinary action in circumstances where a gambling business has not been conducted in compliance with the overall regulatory framework or where there have been material regulatory breaches. Further, The Star is subject to the following additional enforcement action: AUSTRAC: On 30 November 2022, AUSTRAC commenced civil penalty proceedings in the Federal Court of Australia against The Star Pty Limited and The Star Entertainment QLD Limited (the Star Entities) for breaches of the AML/CTF Act. These proceedings are current; a first case management hearing is scheduled for 13 February 2023. In these proceedings, AUSTRAC claims that there have been various contraventions of the AML/CTF Act by the Star Entities, namely: • Breaches of Section 36(1) of the AML/CTF Act (which relate to ongoing customer due diligence); and • Breaches of Section 81 of the AML/CTF Act (which relate to the adoption and maintenance of an AML/CTF program). As mentioned above, each contravention of the AML/CTF Act attracts a maximum civil penalty of between AU$18 million and AU$22.2 million. However, the Statement of Claim does not detail the quantum of the penalty being sought by AUSTRAC against the Star Entities. In a manner similar to the AUSTRAC proceedings against Crown Resorts, The Star and AUSTRAC are likely to enter into discussions to reach agreement on a Statement of Facts (which would include, among other matters, the number of contraventions of the AML/CTF Act as well as the amount of the penalty).
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IMGL MAGAZINE | JANUARY 2023
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