What to do when Queensland is at risk of becoming a sunny place for shady people
The Palaszczuk Government, and particularly Attorney-General Shannon Fentiman, have decisions to make regarding Star’s future in Queensland. All are difficult, writes David Fagan.
The industrial scale money laundering alleged in a Federal Court action against the casino company that is biggest investor in Brisbane’s CBD creates a truly wicked problem for the Queensland Government.
Its challenge is how hard does it go in using its own powers to punish a business that, by the accounts of the federal money laundering regulator Austrac, has made a flourishing business out of turning this state into a sunny place for shady people.
The 2000-plus pages of Austrac allegations set out thousands of instances where Star Entertainment is alleged to have helped launder illegally gained cash.
The particular Queensland issue is the hundreds of occasions in which Star has not just allowed, but facilitated, the use of its Queensland casinos by “gamblers” barred from entering its NSW premises.
The Queensland Attorney-General is now sitting on Star’s response to her request to show cause why it should not be stripped off its licences. Through a spokesperson, she assures InQueensland she is committed to disciplinary action that will uphold gaming standards in this state.
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She should. After all, the government believes in integrity.
Separately, the state’s regulator, the Office of Liquor and Gaming Regulation has now escalated its investigation into the offshore associations of one of Star’s partners and co-licensees in the giant Queens Wharf casino. It has appointed the global firm PKF Integrity as an independent investigator of concerns about the Chow Tai Fook group, first aired back in August.
Another of the Star partners, Far East Consortium, has casino licences elsewhere in the world. It told InQueensland that it continues to monitor Star’s efforts to reform itself and is comfortable “at this current time” with its ongoing association.
But based on the Austrac allegations, it’s probable that other international regulators will be worried about any casino investor with an association with Star and the systemically flawed Australian gaming industry.
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It’s important to note that Austrac’s actions are civil so there is no allegation that Star is a criminal enterprise. But there is no doubt that it has sheltered criminal activity, an issue the Queensland casino regulator has pointed out to InQueensland is both a police and Austrac matter.
So here’s the challenge for the state’s first law officer: How does she deal with an organisation she licences which has a record of circumventing the laws she shares responsibility for? Is it enough to impose a hefty fine – maybe up to $100 million for each of its casino licences- and impose conditions while it cleans up its operations?
The alternative, of cancelling its licence and handing it to another operator, is almost impossible to see, particularly given the delicate state of a redevelopment (the Queen’s Wharf project) which won’t begin opening until late 2023.
The Attorney may well be mindful of other challenges facing Star. The Austrac actions, based on the precedent set from similar anti-money laundering actions, against major banks will attract fines in the hundreds of millions of dollars.
Its operating environment is declining: construction costs in Brisbane are higher than anticipated, the opening of Queen’s Wharf is delayed; running costs will be higher than intended thanks to labour shortages, the international tourism market is slow to recover and the domestic slowdown will hurt restaurant businesses across the board. How many hits can a $3billion balance sheet take before you ask investors for more support?
And then there’s the issue of the regulators, including Austrac, who have been slow to see what is going on in such a high-profile industry. A driver nursing a mobile phone is more likely to be detected and penalised than a money launderer washing dirty cash through a casino full of CCTV cameras.
The lax regulatory environment has to get tighter if Australia is not to trash what’s left of its global reputation as a clean place to do business – and the cost of that (as it is for prostitution) must be borne by those who benefit from the licence to operate. That might be a good start to restoring confidence in both the casinos and the regulatory system meant to oversee them.
