The Star Sydney Faces Charges Over Alleged Forgery of Welfare Checks Amid Second Investigation Into License Suitability

The Star Sydney Faces Charges Over Alleged Forgery of Welfare Checks Amid Second Investigation Into License Suitability

Time Stamp: April 15, 2024 3:13 PM

According to The Sydney Morning Herald, a special manager of The Star Sydney has reportedly claimed the casino forged welfare checks on pokie gamblers and inadvertently permitted clients to obtain $3.2m they didn’t earn from the casino’s machines. Besides this, according to opening proof in NSW’s corporate culture investigation, Nicholas Weeks also laid charges against executives for planning to take legal action against him.

Plans to oust Weeks from the firm:

The NSW Independent Casino Commission appointed Weeks to the Pyrmont casino on the date its casino license was suspended, which was in October 2022, and the suspension was initially supposed to last 3 months. However, his stay at the firm was expanded 3 times at the watchdog’s demand, which is still not sure that The Star is devoted to rebuilding its culture.

Relatedly, the regulator has appointed Adam Bell, SC, to evaluate how the firm has improved during the 2 years since the first investigation. The Star Sydney could be closed if it doesn’t get its license back, cutting billions of dollars in tax contributions from the state government’s bottom line and ending 3,000 jobs.

Weeks, the one who has managed The Star Sydney since October 2022, the time when its casino license was suspended, commented that he thought Robert Cooke, now the ex-CEO of the company, was very dedicated when it came to his job, but eventually proved unsuccessful when it comes to juggling remediation requirements with the requirements of keeping the business afloat.

He reportedly commented that text messages exchanged between Cooke and David Foster, the firm’s current temporary CEO, left him surprised. Those messages referred to intentions to remove him from the firm, involving a suggestion to launch a class action led by the shareholders against the watchdog and him. In addition, these messages provide an example of his opinion that the firm’s focus isn’t where it should be but on the wrong matters.

Commenting on this, Weeks said, according to The Sydney Morning Herald: “I find it extraordinary that the chairman of a listed company and its chief executive would exchange messages contemplating a class action against me personally and the regulator in circumstances where their public position with me is that they’re working co-operatively to address deficiencies that they need to address.”  

The casino’s failure to fix its “ticket in, cash out” machine:

The Star Sydney has reportedly failed to repair a damaged “ticket in, cash out” machine that permitted clients to obtain $3.2m in cash they didn’t win from the casino during 6 weeks in June 2023.

The development was of special concern given that the firm had reportedly not dealt with it by July 24, contradicting his expectations that the ASX-listed casino operation would keep a constant vigil on its financial situation. Alternatively, it didn’t make the necessary repairs to the machine for nearly 2 months, resulting in clients being able to use their tickets again to get additional cash.

Weeks commented on this particular failure: “This incident identified deep cultural problems in relation to the level of rigor through which controls are followed and the level of care in which work is conducted… I was also concerned about the control environment because I anticipated that balancing the books and counting money was something I anticipated the casino would be very good at.” 

Forging welfare checks:

Furthermore, Weeks commented that Bell’s investigation unveiled by Liquor and Gaming NSW officers showed that The Star Sydney had failed to comply with its request to carry out welfare checks on clients who had constantly used its poker machines for over 3 hours.

When Weeks consulted the firm’s compliance records, it was allegedly obvious that the appropriate customer service employees at The Star Sydney had faked the document to show that the aforementioned check had been finished. Speaking on the matter, Weeks said it was instantly obvious the incident wasn’t isolated but spread out across every premise in Sydney. This further led to the inquiry into the Gold Coast, called Operation Falskur, and its Queensland areas in Brisbane.

However, what worried him the most was that the violations were brought up only by the regulator’s inspectors and not by a single employee of the firm, regardless of the scale of the violations.

Allegedly, Weeks thought the firm improperly examined his calendar and emails without asking him if they were allowed to do so. This conclusion was based on messages between Cooke and Foster that related to info they wouldn’t otherwise gain access to. To that effect, on January 31, Foster wrote to Cook: “They are prepping for war, we better do the same”, shortly before the meeting with a watchdog they had no way of knowing unless they gained access to his diary, according to Weeks.

Relatedly, the mood of the exchanges surprised Weeks, considering that Cook and Foster regularly worked with him face-to-face and that he was worried that the firm was reportedly keeping an eye on his diary. On that note, Weeks said, according to The Sydney Morning Herald: “To suggest they wanted to go ‘to war’ with me and the regulator in a circumstance where their licences are suspended and there’s a decision about that suspension already scheduled to occur in June… is extraordinary.”

Proof from Weeks is the first in a series of previous and senior executives during the upcoming 3 weeks. After that, Bell will be appointed to decide, based on these testimonies, whether the firm is fit to continue operating.

Regarding shares of Star Ent., they closed at 48¢, which represents an all-time low, on April 15, suggesting the market is anticipating an exhausting month for the unlucky firm.

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