At times, land based opperators need to consider certain things that real money online casinos don't. The troubles of Star Entertainment in Australia appear to be unending. Regulators and investors find the operator guilty of inability to comply with Australia’s counter-terrorism financing (CTF) and anti-money laundering (AML) laws. They are eager to bring the company to justice.
Star Entertainment is now in hot water for its failure to protect investors. A group of investors has hired the law firm Phi Finney McDonald to file a class action against the operator in the Victorian Supreme Court.
Last year, Maurice Blackburn Lawyers and Slater & Gordon Lawyers filed separate but similar class actions against the operator, alleging that Star breached obligation laws and misled the market. As a result of these breaches, billions of dollars vanished from the Star's market value, they alleged.
The case filed by the Phi Finney McDonald law firm is similar but relates to certain representations the company made from March 29, 2016, to June 13, 2022. On behalf of its clients, the firm alleges that these representations were deceptive and misleading.
Allegedly, the Star made a deceptive representation about its processes and systems being compliant with CTF and AML laws and obligations. The class action also alleges that the operator failed to reveal relevant details to the market and acted in a way contrary to the interests of its investors.
In an official statement, the Star expresses an intention to defend itself. The operator says that the third class action resembles the two securities class actions filed by Maurice Blackburn Lawyers on November 7, 2022, and Slater & Gordon Lawyer on March 30, 2022.
The Blackburn class action highlights the decline in Star’s share value from $4.58 on Oct 6, 2021, the day before newspaper reports and TV shows alleged that the operator had downplayed and ignored the money laundering risks on its properties, to $3.21 six days later.
All the law firms that have sued Star in court want the operator to compensate their clients.
The gambling regulator in New South Wales investigated Star in 2022 and declared the operator unfit to hold a license to run its casino in Sydney because it permitted criminals into its premises, violated gambling regulations, and misled bankers, regulators, and investors about processing financial transactions via the China UnionPay Card.
The NSW Independent Casino Commission (NICC) suspended Star’s license to operate its casino in Sydney. Instead, it appointed a monitor, Nick Weeks, to operate the casino. Although the regulator appointed Mr. Weeks for a 90-day term, starting October 17, 2022, it extended his tenure for another 12 months to Jan 19, 2024.
The Government of Queensland conducted an independent inquiry but did not suspend the operator’s licenses to operate its casinos on the Gold Coast and Brisbane. Instead, it levied a fine of $100 million on the company and appointed a second monitor to help Mr. Weeks.
The Government of NSW declared that it would tax two casinos in the state, including Crown Sydney, to raise an extra revenue of $364 over three years. This declaration led to a further 33% fall in Star’s share value to $1.92.
Meanwhile, AUSTRAC filed a case against the Star in the federal court for allegedly permitting money laundering on its premises. If the AUSTRAC wins the case, the Star will have to pay massive fines.
The SkyCity Entertainment Group, an operator based in New Zealand, is also in legal trouble in Australia. The group owns and operates SkyCity Adelaide in South Australia and finds itself at the centre of a government inquiry related to money laundering.
Brian Martin, a Supreme Court judge, has prepared a report on allegations against SkyCity but says he will submit his reports only after the court issues its ruling on a case filed against the company by the Australian Transaction Reports and Analysis Centre (AUSTRAC), the financial watchdog in Australia.
AUSTRAC filed a case against SkyCity in the federal court over its failure to comply with AML/CTF regulations. Mr. Martin feels that SkyCity’s suitability to continue holding its casino license can be determined only after the court issues its ruling.
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