Star Entertainment has been teetering on collapse for many years now. After Bally’s Corporation agreed to throw a lifeline to the company, offering an AU$300-million stake buyout and the promise of turning things around, there is one issue that neither company has accounted for – the Australian financial regulator’s proclivity for upholding the letter of the law.
AUSTRAC Seeks to Impose a Fair Financial Penalty
This is precisely what is happening with AUSTRAC now seeking to impose an AU$400-million fine ($260 million) on the property resulting from civil penalty proceedings against the operator. Essentially, Star Entertainment is buffeted by regulators over the same past transgressions – the company’s alleged “turning a blind eye” to criminal gangs who were laundering money on the venue’s gaming floors.
Ever since those discoveries were made, Star Entertainment has been threatened by large penalties, many of which have been applied, and the potential revocation of its license. It was through a last-ditch attempt that the company received financial backing from Bally’s Corporation and Australian businessman Bruce Mathieson.
The AU$400-million penalty was cited during a Wednesday hearing during which Simon White SC, who represents AUSTRAC, said that the size of the penalty was proportionate to the misdeeds committed by the property. White did not mince his words in the slightest, and was quoted as saying:
“If you want to run a casino, you’ve got to put in place very costly and significant systems, processes, and controls. There was a manifest failure on the part of Star to do that, and that warrants this court imposing a very high penalty, much higher than $100 million.”
He further argued that the penalty did not seek to “oppress” the wrongdoer, but rather be proportionate to the act the wrongdoer had committed.
One Mea Culpa from which There May Be No Coming Back
Repeat investigations, legal counsel, and mounting costs have put Star not simply on the backfoot, but very close to actual bankruptcy without the possibility of return.
Before Bally’s and Mathieson intervened to bail out the company, Star Entertainment had already run out of options to continue funding its operations. What on-site managers must have thought was a good practice to boost their financial results at the time may now have become Australia’s iconic land-based casino operator’s undoing.
Star Entertainment has been teetering on collapse for many years now. After Bally’s Corporation agreed to throw a lifeline to the company, offering an AU$300-million stake buyout and the promise of turning things around, there is one issue that neither company has accounted for – the Australian financial regulator’s proclivity for upholding the letter of the law.
AUSTRAC Seeks to Impose a Fair Financial Penalty
This is precisely what is happening with AUSTRAC now seeking to impose an AU$400-million fine ($260 million) on the property resulting from civil penalty proceedings against the operator. Essentially, Star Entertainment is buffeted by regulators over the same past transgressions – the company’s alleged “turning a blind eye” to criminal gangs who were laundering money on the venue’s gaming floors.
Ever since those discoveries were made, Star Entertainment has been threatened by large penalties, many of which have been applied, and the potential revocation of its license. It was through a last-ditch attempt that the company received financial backing from Bally’s Corporation and Australian businessman Bruce Mathieson.
The AU$400-million penalty was cited during a Wednesday hearing during which Simon White SC, who represents AUSTRAC, said that the size of the penalty was proportionate to the misdeeds committed by the property. White did not mince his words in the slightest, and was quoted as saying:
“If you want to run a casino, you’ve got to put in place very costly and significant systems, processes, and controls. There was a manifest failure on the part of Star to do that, and that warrants this court imposing a very high penalty, much higher than $100 million.”
He further argued that the penalty did not seek to “oppress” the wrongdoer, but rather be proportionate to the act the wrongdoer had committed.
One Mea Culpa from which There May Be No Coming Back
Repeat investigations, legal counsel, and mounting costs have put Star not simply on the backfoot, but very close to actual bankruptcy without the possibility of return.
Before Bally’s and Mathieson intervened to bail out the company, Star Entertainment had already run out of options to continue funding its operations. What on-site managers must have thought was a good practice to boost their financial results at the time may now have become Australia’s iconic land-based casino operator’s undoing.
