‘Walk the plank’: Misdeeds catch up with Australia’s blighted casinos

And regulators are evidently keen to make an example out of The Star when it comes to holding casino sector executives accountable for their misdeeds, with ASIC determining that there is a strong case against The Star’s former board and executives.

The Star’s new management, helmed by former Tyro Payments boss Robbie Cooke, now finds itself tasked with not only carrying out the remediation work demanded by the regulators, but is also staring down the barrell of a proposed new tax that will see Sydney’s two casinos will pay hundreds of millions of dollars extra on table game and poker machine operations.

Star’s share price, which has fallen by close to 40 per cent over the past year, has slumped another 15 per cent or so on the back of the tax talk, closing out 2022 at $1.77. The stock started the year at $3.68 a share.

Helen Bird, a corporate governance expert at Swinburne University, says the Star was always the easier target, compared to Crown, given the allegations were more recent. But more importantly, the very public allegations against Crown by this masthead – and the double page ads from Crown denying these allegations – meant a ‘head in the sand’ approach was not feasible for the Star’s board.

“That is definitely within the statute of limitations, where the board would arguably, if they were acting well, have wondered whether the same things were happening inside their own organisation,” she said of the Star’s board in the wake of the Crown allegations.

“The reason why there is justifiable criticism of Star, over and above what’s happening at Crown, is that not only was it happening, but they were being given a real-time illustration of consequences of not investigating,” Bird said.

It’s an assessment that ASIC agrees with.

The corporate regulator first showed its intent when AUSTRAC launched legal action against The Star in December for alleged money laundering offences.

“As we have confirmed on a number of occasions, ASIC has had an active investigation underway into the Star group’s conduct since March this year. The outcome of that investigation is imminent, and an announcement will be made in due course,” ASIC deputy chair Sarah Court, said at the time.

But AUSTRAC and ASIC are not the only ones who are targeting the very people who allegedly made a mockery of the regulations designed to keep criminals, money laundering activities, and problem gamblers out of our casinos.

The newly formed NSW casino regulator, the NSW Independent Casino Commission (NICC), has made it clear that it would not allow executives and board members associated with the fiascos at Crown, and Star, to operate in NSW.

“Former directors and executives of The Star who retain a close associate approval will very soon have that approval rescinded,” an NICC spokeswoman told this publication.

“While the NICC is not empowered to take disciplinary action against them, it goes without saying that it would be unlikely those individuals could ever again obtain close associate approval to enable them to work in a NSW casino. Likewise, this would extend to pre-Bergin executives and directors of Crown Melbourne and Crown Perth,” it said.

The NICC is taking things further by considering whether it should report some of The Star’s pre-Bell Inquiry executives to their constituent bodies for code of conduct breaches. This includes the governing bodies for the accounting and legal professions.

It is an important issue, according to Bird. Beyond the impact on the two companies of this poor behaviour lies the issue of how the individuals who allowed this to happen are held to account, and prevented from engaging in this poor behaviour again.

Bird said there is a perception that holding individuals executives accountable gets lost in the battle to hold the corporations accountable.

“In terms of signalling on poor behaviour, acting as a deterrent to others who might be contemplating a similar activity, it really gets lost in the wash,” Bird says.

“When we talk about the officers of the corporation, and the board of directors of the corporation taking accountability, their accountability is essentially to walk the plank,” she says.

The issue is what is stopping these executives from turning up elsewhere and creating the same problems.

She sees this accountability as part of the larger problem of balancing risk-taking with the need for accountability.

“There is always this great complaint that the law is far too harsh, demands too much of directors, and encourages them to be only focused on legal compliance and not on entrepreneurial-like encouragement of risk taking,” she says.

“The reality is a different place altogether.”