Casino bosses secretly mulled ‘war’ against regulator

William Ton and Jack Gramenz |

Public hearings into the Star casino operations in Sydney will begin on Monday.
Public hearings into the Star casino operations in Sydney will begin on Monday.

Sydney’s Star Casino remains unsuitable to operate a casino licence, its appointed manager says, as private messages reveal senior management discussing “going to war” with its regulator.

The casino’s operations were handed to regulator-appointed manager Nicholas Weeks to ensure operations continued when its licence was suspended in 2022 after a previous inquiry.

But Mr Weeks on Monday told an inquiry the casino had not made headway on the structural reforms needed to ensure it operated properly after the probe, which uncovered widespread failings.

The Star Casino in Sydney's Pyrmont
Star hasn’t made headway on the structural reforms needed, the inquiry was told. (Flavio Brancaleone/AAP PHOTOS)

“The company still has some distance to travel in terms of setting up structures and governance arrangements to do that in the absence of the manager,” he said.

This second inquiry, led by Adam Bell SC, into Star Entertainment Group’s suitability to run the key facility has begun public hearings to probe concerns the company was not proactively implementing reforms.

The initial investigation, also led by Mr Bell, found Star unfit to hold a casino licence following revelations of a notorious gang-linked junket operator running an illicit cage within a premium gaming room and Chinese debit-card transactions being disguised as hotel expenses.

Mr Weeks delivered two reports, in October and November, to the NSW Independent Casino Commission and to Star management in November outlining deficiencies in the operation that still needed to be addressed.

Despite general acceptance of his first report at a subsequent meeting, the group’s then-chief executive Robbie Cooke and chair David Foster sent a response letter with an “extensive amount of commentary and rejection” of its content.

Mr Weeks was “surprised and disappointed” with the response as it was contrary to what the organisation’s board had told him.

“The company’s rejection of my assessment … suggested there was an increased chance that the company was not going to take steps to address those findings and observations,” he said.

In emails discussing their response to the reports, Mr Foster told Mr Cooke: “If done right, it could be a catalyst to get rid of (Mr) Weeks.”

The letter the duo was discussing was to be delivered four months before the casino commission would reconsider the licence, Mr Weeks said. 

Star Casino in Pyrmont, Sydney.
This is the second inquiry into Star Entertainment Group’s suitability to run the casino. (Flavio Brancaleone/AAP PHOTOS)

“The (fact) that they were concerned about getting rid of me rather than delivering a response that would be responsive to important matters is a concern to me,” he told the inquiry.

A meeting between Mr Weeks, Liquor & Gaming NSW and two law firms in early February to discuss Star’s response to the letter was apparently “monitored” by the casino bosses the day prior.

Mr Foster wrote to Mr Cooke: “OK, they are prepping for war. We better do the same.”

Mr Weeks said it was extraordinary Star was “monitoring” his diary entries while it was trying to regain trust and confidence with the regulators.

“To suggest that they want to go to war with the regulator and me in circumstances where their licence is suspended and there’s a decision about their suspension … is extraordinary,” he said.

The two leaders had also queried grounds for launching a shareholder class action against Mr Weeks and the casino regulator despite their public position that they were working cooperatively to address deficiencies.

“It’s impossible to reconcile the two,” Mr Weeks said.

The casino was hit with a $100 million fine and its licence was suspended after the previous inquiry’s October 2022 report was delivered.

The hearings come as Star Entertainment Group battled falling revenues across its operations, driven by the poor performance of its high roller-focused premium gaming rooms.

The group’s shares had plummeted by more than 11 per cent on the stock exchange by Monday afternoon.