Star Tumbles 23% on Report It Enabled Suspected Laundering
(Bloomberg) -- Star Entertainment Group Ltd. shares tumbled 23% after the Sydney Morning Herald reported the company has enabled suspected money laundering, organized crime and fraud at its Australian casinos for years.
Star’s market value plunged to A$3.1 billion ($2.3 billion) in Sydney trading after the newspaper said Star wooed big-spending gamblers allegedly linked to criminal or foreign-influence operations between 2014 and 2021.
Star’s board had been warned its anti-money-laundering controls were failing, the newspaper said. It cited an investigation by Nine Entertainment newspapers the Sydney Morning Herald and the Age, and television program “60 Minutes.”
Investors are fretting after similar allegations by the same publications in 2019 against Star’s main rival, Crown Resorts Ltd., triggered a series of public investigations into Crown that has left its future as an Australian casino operator in doubt.
In a statement, Star said it’s “concerned by a number of assertions within the media reports that it considers misleading. We will take the appropriate steps to address all allegations with relevant state and federal regulators and authorities.”
In February, the New South Wales state gaming regulator judged Crown unfit to operate its brand new casino in Sydney after an official inquiry found it had facilitated money laundering for years. A regulatory report into Crown’s suitability to run its flagship Melbourne casino is due on Oct. 15.
The Sydney Morning Herald said Star has been engaged in many similar activities, without undergoing the same level of public scrutiny as Crown.
The NSW government said in a statement that a review of Star’s operations, announced by the state gaming regulator last month, will examine the company’s level of compliance and whether it remains suitable to hold a casino license. Findings are due by the end of March.
Certain individuals banned by authorities from gambling at Star’s casino in Sydney -- because of their links to organized crime -- have been permitted to gamble at the company’s Gold Coast casino in the state of Queensland, according to the Sydney Morning Herald.
Queensland’s gaming regulator said in a statement that “allegations of organized crime infiltration are taken very seriously,” without elaborating.
Star said in its statement that it “operates in a heavily regulated industry. We are subject to thorough and ongoing regulatory oversight including compliance checks and reviews across the company’s operations.”
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