David Foster Leaves the Star Entertainment Group

We here at NZCasinoClub.com have been covering all the ups and downs of the Australian and New Zealand casino world in our news blogs. Star Entertainment has been in the news a lot lately, and once again, they’re back.

The procession of high-profile departures continues at The Star Entertainment Group, with the latest casualty being Chairman David Foster. This comes not long after another leadership change at Star Entertainment amid regulatory scrutiny. The company has named Anne Ward, a non-executive director who has been with the company since August 2022, as his immediate replacement.

In a statement, Star Entertainment said David Foster had relinquished his position of company chairman. He would continue to remain as a member of the company’s board of directors ‘for an interim period’, however, and also remain on the board of subsidiary companies of the group.

Critical Timing

Foster, who was formerly the head honcho at Suncorp Bank, took over the role of Chairman at The Star Entertainment Group in March 2023. Since last month he had picked up the additional responsibility of executive chairman with the sudden departure of CEO Robbie Cooke.

The timing of Foster’s departure is critical as it happened with the Star Entertainment Group going through a second inquiry by the New South Wales Independent Casino Commission (NICC) to determine if it’s Sydney casino, The Star Sydney, is fit enough to be awarded a gambling license.

The NICC Comes a-Calling: Act I

The current inquiry that the Star Entertainment Group is facing is the second one, and it is being led by Adam Bell SC – who incidentally led the first inquiry as well – on behalf of the NICC.

The first inquiry that the Star Entertainment Group faced was back in 2022, and it yielded some shocking results, including glaring flaws in the anti-money laundering processes, communications processes and the general cultural processes of the company.

Among other things it led to the discovery of the fact that the company had violated existing rules by falsely/wrongly classifying debit card-based gambling transactions involving Chinese players to the tune of over $600 million. After doing that, it proceeded to engage in a cover-up of this fraudulent practice by lying to its banks about it.

The NICC Comes A-Calling: Act II

The current inquiry looks at, among other things, the suitability of the casino operator to hold a gambling license in Sydney.

The inquiry has yielded some shocking facts. These include revelations that suggested former management executives at the company had resigned because of their unhappiness with the operator’s top echelon leaders and their style of functioning and also indicated that Cooke may have ushered in a culture of secrecy and exclusion in the company.

Adding fuel to the fire were messages that Foster and Cooke exchanged, where they discussed matters ranging from the unethical – their whisking off of information from the diary of independent manager Weekes – to the bizarre. ‘Bizarre’ included their discussion of the need to prep for war like the other party, Foster’s rant about the need to ‘abolish the NICC’, and the possibility of initiating a shareholder class-action lawsuit against the independent manager.

Inquiries Impact Star’s Margins as Q1 Fiscal Results Show Sharp Decline

Tying into the uncertainty shrouding the whole situation is a 4.6% downward slump year-on-year of net revenues, ending up at approximately $270.7 million. There was a slump in the premium gaming room receipts as well for its three major casino operations:

19.3% year-on-year at the Star Sydney
20% year-on-year at the Star Gold Coast
28% year-on-year at the Treasury Casino and Hotel

Star Entertainment somehow – almost miraculously – beat all odds to retain its NICC-issued license through a conditional suspension plan. The plan included, among other things, payment of fines to the tune of a whopping $65 million. It was also required to set things right through a remediation plan that would be supervised by Nicholas Weekes, an independent manager assigned to clean up the Star mess.

Long Line of Departures

Speculation is rife that Foster’s departure may have crystallized after his statement to the inquiry earlier that the Star Entertainment Group – his company – was not fit to operate a casino in New South Wales. He further said that there were zero scenarios that allowed the casino to run unsupervised and on its own.

Foster is the latest in a long line of Star Entertainment executives – the tenth since December, actually – to exit the group. Others who have already parted ways with the company include – apart from former CEO Robbie Cooke – Christina Katsibouba, former Chief Financial Officer, former Chief Legal Officer Betty Ivanoff and George Hughes, former Chief Customer and Product Officer.