If anti-gambling advocates in Australia didn’t already have sufficient cause to be wary of the gaming industry, Star Entertainment is providing them with another. In addition to facilitating money laundering and falsifying official documents, the casino operator has now confessed to further unlawful activities as part of its regular operations.
Star Entertainment’s Treasury Brisbane casino at dusk. The casino operator is now facing new fines for permitting the utilization of credit cards for gaming chip acquisitions. (Image: Dreamstime)
In the most recent blow to the Australian gaming environment, Star’s executives have acknowledged that they unlawfully sold gaming chips. This was done by allowing gamblers to use credit cards for their purchases, according to the Australian Financial Review.
The company admitted to these facts to Queensland Attorney-General Shannon Fentiman, leading to a guilty plea on seven charges. However, as Star has demonstrated multiple times, if it infringed the law at Treasury Casino and the Star Gold Coast in Queensland, it likely did the same elsewhere.
More Consequences to Come
Star enabled some customers who visited its Queensland casinos to purchase chips with credit cards. These allegations stemmed from the company’s admission that it altered records to permit Chinese gamblers to use their Chinese UnionPay (CUP) cards.
As per Chinese law, these bank cards are not allowed for gambling transactions. Consequently, Star previously accepted using false invoices for hotel stays that were actually chip purchases.
There were at least two extended periods when Star engaged in this deception, manifestations that it deliberately sidestepped the law. From June 2017 to December 2018 and from March 2022 to April 2022, it allowed the practice to continue.
The second period was while a review into its law-breaking was underway. Star’s executives claimed during the Queensland investigation, which concluded a year ago, that they recognized their mistakes and wouldn’t break the rules again.
Star is already facing more than AUD200 million (US$213.28 million) in fines in Queensland and New South Wales (NSW). Queensland officials are now assessing how much to add to that and will declare their decision on June 2.
NSW also prohibits the use of credit, as well as debit, cards for making gaming-related transactions. As a result, Star could expect the state to potentially impose new charges after already temporarily suspending its gaming licenses there. In addition, since Crown Resorts was also responsible for the same practices at its casinos, there’s a possibility it will face fresh fines, too.
Searching for Funds
Star is only getting worse as it rides the wave of negative exposure. It is reportedly already seeking a buyer for its 50% stake in the Sheraton Grand Mirage. It hopes to obtain the AUD200 million that would cover the two fines in NSW and Queensland.
A month ago, the company declared that it was in the process of gathering AUD800 million ($545 million) through a fund-raising exercise. That money would assist it in repaying debt following a financial loss in the first half of the fiscal year. It also had to suspend shareholder dividends as a result of that loss.
Star’s stock price has dropped drastically, partly due to the ignominy it brought upon itself, as well as a softer gaming market. In August 2018, the company traded at AUD4.96 (US$5.28). By this past February, it was down to AUD1.52 (US$1.62). Today, as of press time, it was trading at AUD1.42 (US$1.51).
