Australia’s Star Entertainment Group (SGR.AX) said on Monday a regulator-appointed manager would be stepping in to run its Sydney casino after an investigation by an independent commission found it had failed to prevent money laundering and criminal activity.
The firm was fined A$100 million ($62 million) by the New South Wales Independent Casino Commission (NICC), which also suspended its license to operate the casino in Sydney, effective Oct. 21, Star said in a statement.
The commission appointed Nicholas Weeks as the manager, who will assume full control from Friday for the next 90 days to ensure the casino is compliant with all relevant laws.
The suspension period will be crucial for Star to prove its merit to hold a casino license.
Weeks’ authority as a manager of Star’s assets are limited to the operational needs of the casino.
“The period during which the manager has control will enable the exploration between the NICC and the operator and TSEG (The Star Entertainment Group) of the possibility that the former operator may be capable of demonstrating to the NICC it may become suitable to hold a casino licence,” the commission said in its notice to Star.
Keeping the casino operational is in public interest to protect the thousands of jobs at risk, the notice said.
The decision to slap Star with the maximum fine possible comes on the first day on the job for Star’s new Chief Executive Robbie Cooke.
Star’s shares on the Australian bourse are on a trading halt.
Australia’s gambling industry has been in the spotlight in recent years, with public inquiries lashing its biggest casino operators due to lapses in money laundering protections. ($1 = A$1.6113)