In a media statement published by officials, officials of the Australian state talked about new laws the government intends to introduce to increase regulatory scrutiny over the state’s casinos.

Yvette D’Ath, Minister of Justice and Attorney-General, said: “The Palaszczuk government is committed to ensuring Queensland casinos operate under strict laws that prioritise integrity and gambling harm minimisation.”

Referring to the accountability of casinos in the state, D’Ath added: “Casino executives will be required to undertake particular duties in relation to the operation of a casino, and there will be significant personal penalties for non-compliance…There will also be a supervision levy imposed on casino licensees so that the costs of regulating casinos will not be passed onto taxpayers.”

In her statement, D’Ath also referred to a review conducted by Robert Gotterson into Star Entertainment Group in 2022. This outlined a series of recommendations that will be implemented in the bill.

These include rules around carded play, cashless gambling for transactions of $1,000 or less, players having to set time or loss limits, a supervision levy, rules around carded play data, regular investigations and appointment of special managers.

“This Bill will enable us to continue our work in implementing all 12 recommendations outlined in Mr Gotterson’s review,” she said.

This step up in safer gambling measures comes on the back of the Gambling Harm Minimisation Plan for Queensland 2021-25. This identified that 70 per cent of Queenslanders gamble, with more than 40,381 electronic gambling machines running in 1,080 hotels and clubs and a further 3,736 EGMs in casinos. The same report indicated that more than 70 per cent of Gambling Help clients identified EGMs as “problematic”.

The Gambling Harm Minimisation Plan for Queensland is a plan based on the four strategic pillars of leadership and culture, technology and environment, public health approach and regulatory framework. As part of its efforts, the government has already started tackling issues in the Gambling Harm Minimisation Plan for Queensland, including the Annual Gambling Harm Awareness Week, the When Gambling Took Over campaign, and the Let’s Start Yarning About Gambling campaign. The government also provides gambling help brochures, which are translated into 11 languages, including English, Arabic, Japanese, and Filipino.

The Casino Control and Other Legislation Amendment Bill 2023 fits into the Regulatory Framework pillar, trying to hit the goal of “Queensland actively participating and leading in the national regulatory space” by introducing “evidence-led and outcomes-focused” legislation.

The Bill is also aimed to hit one of the “Key Deliverables” of the Regulatory Framework pillar to “strengthen and encourage effective harm minimisation outcomes”. D’Ath noted: “These reforms will continue to modernise Queensland’s gambling and casino laws to ensure they remain effective now and into the future”.

This forms just one of a number of regular updates covering an array of industry issues and jurisdictions by Steve Chen, and the team at Major League Content.

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Following an investigation by Queensland’s Office of Liquor and Gaming Regulation, the embattled casino operator had entered a guilty plea in the Brisbane Magistrates Court earlier in the year.

Seven of the charges relate to state-wide casino legislation that prohibits the purchase gambling chips with a credit card, with $170,000 worth of wagers to this effect said to have been accepted between 2017 and 2022. 

This, the court heard, was due to a lack of adequate controls in relation to EFTPOS machines that saw customers able to use credit cards to make such deposits.

The remaining four relate to the distribution of promotional or advertising material in February 2022 to individuals that were banned or excluded from the company’s Queensland-based properties.

In addition to the aforementioned A$140,000 penalty, Star, which operates Brisbane’s Treasury Casino and the Star Gold Coast, was also ordered to pay court costs of $3,250. 

It was also heard that the group had been warned by OLGR a number of times about similar conduct in the past.

“Palaszczuk Government expects all Queensland casinos to operate lawfully and ethically,” commented Yvette D’Ath, Queensland Attorney-General and Minister for Justice.

“Allowing credit betting and distributing promotional material to excluded persons are not acceptable ways for casinos to operate in Queensland. The authority to operate a casino is a privilege.

“In return, the community expects The Star, at an absolute minimum, to effectively control risks, such as gambling harm and money laundering.

“Ensuring public confidence in our casinos is a priority. That’s why we will continue to strengthen and enforce our casino laws.

“The regulator is closely monitoring all casinos operating in Queensland and will take action if they fall short of their requirements.”

In reaching his conclusion, Magistrate Shane Elliott noted that the offending related to staff oversight, adding that there was no intentional attempt to contravene legislation.

This builds upon previous action taken against the group that has seen Star be found unsuitable to hold a casino licence in New South Wales and Queensland.

The company was subsequently hit with a pair of A$100m penalty packages as well as further remediation orders. 

The company is also the subject of enforcement action from Australia’s financial watchdog AUSTRAC, and currently counts four class action lawsuits being levelled against the group.

Speaking to local media, a spokesperson said of this latest financial sanction: “We are absolutely focused on improving and returning to suitability in Queensland and NSW, with the goal of earning back the trust of our regulators, governments, shareholders, team members, guests and community.”

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After being found unsuitable to hold a casino licence in New South Wales and Queensland, Star was subsequently hit with a pair of A$100m penalty packages as well as further remediation orders. 

Furthermore, the operator is also the subject of enforcement action from Australia’s financial watchdog AUSTRAC, and currently counts four class action lawsuits being levelled against the group.

Citing these array of penalties, costs associated with the regulatory reviews and contribution towards the Bell review in NSW, in addition to the impairment of Sydney property assets, the firm has seen net loss through the aforementioned six month period plunge to A$1.26bn.

“The priorities of the manager are for the group to enhance its current control environment, implement new internal control manuals, uplift the financial crime program, conduct a comprehensive root cause analysis, uplift management capability and undertake a comprehensive reform of the group’s culture,” noted Ben Heap, Star Chair. 

“These priorities are the foundation to effect significant improvement in risk, governance, culture and controls of the group, with the group’s objective of returning to suitability to hold its casino licences. 

“The group takes its obligations seriously and considers the ability to hold a casino licence a privilege. 

“The Board and senior management acknowledge the mistakes of the past and are working with Mr Weeks, the NICC, ILGA and OLGR to develop and deliver on remediation measures to return the group to suitability and regain the trust needed to hold its casino licences.”

Revenue through the time frame closed at A$1.01bn, up 75 per cent, with contributions from Sydney, the Gold Coast and Brisbane coming in at A$541m (+127 per cent), A$276m (+53 per cent) and A$196m (+22 per cent).

It was noted that Queensland properties achieved record domestic revenues, with the Gold Coast cited as gaining a “highest property revenue performance on record”. Sydney, however, was impacted by regulatory-driven operational changes and increased competition. Group-wide EBITDA secured a year-on-year uptick to A$200m. 

Looking ahead, the company has reiterated an “urgent focus” on remediation actions to support return to suitability, with an array of critical measures outlined in the H1 report.

These include a comprehensive and urgent focus on remediation actions, the need to repair and strengthen relationships with regulators and stakeholders across NSW and Queensland, taking steps to remediate and return to suitability to hold casino licences in NSW and Queensland and complete new senior executive and board appointments.

FY 2023 underlying EBITDA is expected to be in the region of $330m to $360m, which includes estimated remediation costs of $35m to $45m. 

Robbie Cooke, Group CEO and Managing Director, said: “We have been pleased with the ongoing strength of trading across our Queensland-based properties while trading at The Star Sydney has been impacted by operational changes associated with the outcome of the Bell Review and increased competition. 

“Our focus has been and remains on working constructively with our regulators and the NSW Manager and Queensland Special Manager to urgently remediate our businesses as we seek to return to suitability. 

“Our key priority is to regain the trust and confidence of our community and demonstrate to our regulators that we are suitable to hold our casino licences. 

“To that end, we continue to support the NSW Premier’s industry-wide initiatives around cashless gaming and improved harm minimisation.” 

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As reported by an array of outlets, those venues in question are Townsville’s Vile Casino as well as the The Cairns Reef Hotel Casino, which were accused of using unapproved junkets.

This came after Queensland’s Office of Liquor and Gaming regulators launched an investigation earlier this year following reporting by The Sydney Morning Herald, The Age and 60 Minutes. This is the same trio that uncovered the initial, then perceived, failings by Crown Resorts and Star Entertainment that have been much discussed.

As revealed by Australian Associated Press, Queensland’s latest regulatory action sees the Townville property accused of utilising unapproved junkets. Court proceedings over the alleged breaches are expected to follow in January.

According to a Liquor, Gaming and Fair Trading spokeswoman, approval must be issued regarding agreements or arrangements, including junkets.

“Queensland casinos are expected to operate lawfully, ethically, and in a way that maintains the highest standards of integrity and public confidence,” it was noted.

“OLGR takes matters of non-compliance by casino operators seriously. It is important that the penalties for breaches of Queensland’s casino legislation are appropriate and send a strong message that unlawful and criminal behaviour will not be tolerated.”

In a separate investigation, the Reef Casino in Cairns has been fined $10,000 after admitting to breaching the Casino Control Act over unapproved junket use.

A spokesperson for the venue is quoted in local outlets as stating: “The court outcome against the operator of the Reef Hotel Casino signals the approach Queensland casinos can expect from the OLGR if the operator fails to meet its requirements under law.”

It has been a busy few months for the Queensland regulator after Star Entertainment was last week hit with a second A$100m penalty package and been given a 12 month time frame to get its house in order after the latest disciplinary actions against the beleaguered group was taken.

The financial penalty applied, which mirrors the fee imposed in New South Wales, will be paid through 2023 in three instalments on March 31 (A$30m), June 30 (A$30m) and December 31 ($40m).

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Shannon Fentiman, Queensland Attorney General and Minister, has confirmed the issue to the group, that boasts two properties in the state, with it believed that “grounds have arisen for taking disciplinary action against The Star”.

These are rooted in the findings of an external review into the company that was undertaken by Robert Gotterson, which saw the firm deemed unsuitable to hold a casino licence within Queensland in developments that mirrored those that had already been encountered further south in New South Wales.

Gotterson found that the company’s business, whose network includes casinos in Brisbane and the Gold Coast, with the licence of the former to be transferred to a near A$4bn development upon completion next year, was operated “in a way that is inconsistent with the achievement of the objectives of the Casino Control Act 1982”.

A range of potential disciplinary actions could subsequently be imposed on the operator, with these possibilities ranging from the case being dropped to a licence suspension or A$100m penalty, similarly to that already encountered further south.

Upon confirmed receipt of the notices, the group noted: “The notices set out the potential disciplinary actions which may be taken, which range from taking no further disciplinary action to one or more of the following: a letter of censure, written directions, a penalty of up to A$100m, cancellation or suspension of the relevant casino licence or the appointment of a special manager. 

“The Star entities have 21 days to respond to the notices. The minister will consider all responses received before deciding what (if any) disciplinary action to impose or take.”

Last month, Star Entertainment Group was hit with a record penalty for an Australian operator due to money laundering failures, with its licence also suspended indefinitely, due to the findings of a report by Adam Bell.  

Effective from October 21, the company received written notice from the New South Wales Independent Casino Commission and was told to pay a total penalty of A$100m ($62m, £55m) on a timetable yet to be agreed by the NICC.

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This has seen Fentinman notify the company that it has been “formally determined” that Star itself, as well as a number of subsidiaries, are “not suitable to be associated or connected with the management and operations” of a casino complex due to “not being a person of good repute”.

Issuing an update on the matter, the operator updated that no decision has yet been made regarding the disciplinary, or other, action that will be taken as part of this process.

However, the company “will be afforded an opportunity to show cause, or make submissions as a party having an interest in the relevant licence”.

These determinations follow an external review being undertaken into the company by Robert Gotterson, which saw the firm be found unsuitable to hold a casino licence within Queensland in developments that mirrored those that had already been encountered further south in New South Wales.

Gotterson found that the company’s business, whose network includes casinos in Brisbane and the Gold Coast, with the licence of the former to be transferred to a near A$4bn development upon completion next year, was operated “in a way that is inconsistent with the achievement of the objectives of the Casino Control Act 1982”.

Earlier this month, the Queensland government detailed the introduction of tougher laws and stricter oversight of casino operators in the latest development to impact the country’s retail gaming establishments.

This now permits the government to issue a fine of up to A$100m to casino operators as a disciplinary measure, a figure that is familiar to the group after being issued with a record A$100m penalty in New South Wales.

Last week, Wexted Advisors’ Nicholas Weeks, formerly of  Crown Resorts and NRL, was named as manager of Star Sydney until matters can be rectified and it is deemed likely that The Star can achieve suitability.

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Shannon Fentiman, Attorney-General and Minister for Justice, noted that “the strong reforms” contained in the Casino Control and Other Legislation Amendment Bill 2022 are designed to ensure casinos are operating lawfully and transparently, and take their responsibilities to reduce gambling harm seriously.

This comes after former Court of Appeal Judge Robert Gotterson found Star Entertainment unsuitable to hold a casino licence within the state following a review that examined a broad range of issues and highlighted “major failings and concerns”.

The government instigated review also made a series of recommendations, these include the appointment of a special manager to mirror arrangements in New South Wales, the introduction of an identity linked gambling card in Queensland casinos, implementation of cashless gambling, and the setting of limits for electronic gaming machines.

“These laws aim to improve integrity and deter illegal, dishonest and unethical behaviour in Queensland’s casinos,” Minister Fentiman said. 

“Given the extremely serious and concerning findings of the Gotterson Review, the Government has acted swiftly to prioritise critical reforms that address certain key matters in Mr Gotterson’s report.

“The new laws provide for a special manager who could be appointed to monitor and direct casino operations and report back to government so that further action can be taken where necessary.

“The reforms also remove any requirement for the government to compensate casino operators for introducing stronger regulatory laws, as has been done in other states.

“In addition, the government can now issue a fine of up to $100m to casino operators as a disciplinary measure.

She also said that it was crucial that these reforms were in place as soon as possible in preparation for the potential outcomes of the show cause process in relation to The Star Entertainment Group.

“I announced last week that the Office of Liquor and Gaming Regulation will be issuing a show cause notice to The Star. These reforms will give the government more options to respond to the potential outcomes of that process,” she said.

Other new laws include an obligation for casinos to report breaches of the law and cooperate with the regulator or face significantly increased penalties.

The reforms also pave the way for a transition to safe cashless gaming, which is intended to address some of the money laundering concerns identified in the Gotterson review.

“The new rules will modernise Queensland’s gambling legislation to allow new payment methods and systems to be considered for use, provided they are safe and reliable,” Fentiman added.

“There are stringent checks and balances in place so any cash alternatives must be considered and approved, including technical evaluations and harm minimisation measures.”

The Attorney said further reforms recommended by the Gotterson Report, including strengthening provisions to reduce gambling harm and money laundering, are continuing to be progressed.

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Shannon Fentiman, Queensland Attorney-General and Minister, made the comments after studying the findings of a report that was undertaken by former Court of Appeal Judge Robert Gotterson.

Fentiman noted that following the review, which examined a broad range of issues and highlighted “major failings and concerns,” The Star would be afforded the opportunity to respond to the findings through a show cause process. 

This is currently being prepared by the Office of Liquor and Gaming Regulation, and, similarly to in NSW, will give the group a 21 day window within which to respond to the findings.

Gotterson found that the company’s business, whose network includes casinos in Brisbane and the Gold Coast, with the licence of the former to be transferred to a near $4bn development upon completion next year, was operated “in a way that is inconsistent with the achievement of the objectives of the Casino Control Act 1982”.

“The ways in which this occurred were similar in some respects to those identified by Mr Adam Bell in his inquiry in New South Wales,” it was noted, with an array of failings highlighted in detail.

It was found that the firm encouraged excluded individuals within Victoria and NSW, as well as “persons it had grounds to suspect may have been involved in criminal activity,” to gamble at its Queensland casinos.

“This shows a poor corporate culture, a failure of those responsible for the AML/CTF program to intervene, and a senior management that failed to have in place mechanisms to restrain the actions of a marketing team whose focus was on drawing in business,” the report continued.

Furthermore, Star was found to be “less than forthcoming” in its usage of China UnionPay debit card facilities, with “some efforts” undertaken to “characterise these transactions as related to hotels when their primary use was for gambling”. At worst, the report added, the group’s actions were deliberately misleading.

Gotterson also found that, despite an improvement being witnessed, it was a “serious dereliction” of AML/CTF responsibilities that deficiencies explored in the inquiry could not only occur in the first place but that they could persist over a number of years.

The company’s responsible gambling program was also said to need further and more rapid improvement, including appropriate resourcing and implementation of facial recognition technology.

The Government instigated review also made a series of recommendations regarding “further improvements to casino procedures, regulations and legislation which I consider are warranted to enhance integrity, minimise the potential for harm, ensure probity and restore public confidence in casino operations”.

These include the appointment of a special manager to mirror arrangements in New South Wales, the introduction of an identity linked gambling card in Queensland casinos, implementation of cashless gambling, and the setting of limits for electronic gaming machines.

“Considering the serious and concerning findings of the Gotterson review and his advice regarding suitability, I have formed the view that The Star is unsuitable to hold a licence in Queensland,” Fentiman said.

“In accordance with the legislation, once a formal determination of unsuitability is made, The Star will be given the opportunity to respond to that finding through a show cause process. 

“Following the show cause process, a range of remedial actions will be available to Government, including fines, suspending or cancelling licences, and as recommended by Mr Gotterson, appointing a special manager, as has been done in Victoria.”

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The inquiry is to investigate the use of China UnionPay debit or credit card facilities, and other arrangements, to help facilitate gambling by Chinese nationals despite currency movement restrictions.

In New South Wales, where closing submission wrapped up last month as part of an ongoing investigation to determine if the group remains suitable to hold its licence, hearings heard allegations that The Star disguised A$900m of payments from UnionPay bank accounts through hotels adjacent to its venues, before transferring the money to patrons.

Queensland also confirmed that a commitment to anti-money laundering responsibilities will be looked into, including detecting and preventing money-laundering risks, implementation of know your customer systems, and enhanced and ongoing customer due diligence obligations, particularly as they relate to high risk and high value customers.

Furthermore, management of VIP patrons, action taken regarding exclusions, and approach to gambling harm minimisation, including fitness for purpose, implementation, and resourcing, will also be under the spotlight.

Shannon Fentiman, Queensland Attorney General, also noted that the state government is to invest more than A$4m extra over the next four years into ensuring casinos are operated lawfully.

“This funding will pay for additional specialist audit resources dedicated to monitoring casino compliance. This will complement existing onsite casino inspection resources, providing more comprehensive regulatory oversight,” she said.

“Changes to the Casino Control and Other Legislation Amendment Bill 2022 are already before the Queensland Parliament as we move to strengthen the casino regulatory framework.

“This includes increased penalties (maximum $50m), self-reporting obligations and the ability for myself, as the Minister, to direct a casino operator to engage an approved qualified expert to inquire into and report on any matter relevant to the conduct of casino operations.”

Alongside releasing the terms of reference for the independent external review of the operations of The Star casinos in Queensland, it has also been confirmed that Robert Gotterson is to lead the probe.

The Attorney General noted that the inquiry into the operations of The Star Gold Coast and Brisbane’s Treasury casinos will have all the powers, authorities, rights, privileges, protection and jurisdiction of a commission of inquiry.

“There have been serious allegations made, along with a number of public inquiries and regulator investigations over recent years,” Fentiman continued.

“Given the weight of evidence that has emerged regarding the operations of The Star Sydney and the shared governance and operational arrangements of Star Group entities more broadly, it is important the inquiry can seek information from anyone it sees fit.

“His Honour will be able to conduct interviews, and direct questioning of Star employees or other relevant persons should he consider it necessary, as well as review the evidence and the findings of the Bell Review and ongoing Office of Liquor and Gaming Regulations’ investigations.”

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This means that the review, which was first announced last month to determine if the company is suitable to keep hold of its casino licence in the state, will now be heard publicly.

The review, which is considering how effectively The Star is complying with its statutory obligations and whether it remains suitable to hold its licence, commenced after Adam Bell was appointed by the Independent Liquor & Gaming Authority. 

Bell, the lead senior counsel who assisted the Bergin Inquiry into Crown Resorts, advised the ILGA that he considers it in the public’s interest to hold public hearings on matters including, but not limited, to The Star’s maintenance and administration of systems to counter money laundering and infiltration by organised crime. 

This follows reports suggesting that the company, which runs Queensland casinos on the Gold Coast and in Brisbane as well as in neighbouring New South Wales in Sydney, has enabled suspected money laundering, organised crime, large-scale fraud and foreign interference through its venues.

An investigation by the Sydney Morning Herald, Age, and 60 Minutes alleges that, between 2014 and 2021, Star cultivated high-roller gamblers associated with criminal or foreign-influence operations. It has been confirmed that Star Entertainment Group is to also face an investigation in Queensland.

The ILGA, which says that it is “fully supportive” of Bell’s decision, expects the hearing to be held in March 2022. The publicly available report will be due to ILGA by June 30, 2022

Furthermore, the Star Entertainment Group has also responded to press releases issued from Slater and Gordon and Maurice Blackburn in relation to potential class actions against The Star. 

Slater & Gordon says that it is investigating a class action about The Star’s conduct and the adequacy of its internal controls, with Maurice Blackburn said to be preparing action in relation to alleged inadequacies in The group’s systems for ensuring compliance with its obligations to manage anti-money laundering and counter-terrorism financing risks. 

“The Star is not aware of any proceedings having been filed and has not been served with any originating process in respect of any class action proceedings,” the company said.  “Should any proceedings be commenced, The Star intends to defend any such proceedings”.

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