The Star casino failed to follow state gambling tax requirements in 2020 when foreign high-rollers continued playing as non-residents despite living in NSW while the border was shut due to the pandemic.
Star’s group general counsel Andrew Power on Monday told an inquiry he was aware the casino had not “strictly followed” a procedure that governed the duty or levy payable by the casino for particular players depending on where they live.
Under the law, a rebate player is a premium player who does not normally live in NSW and is in the state for less than 193 days in a year. The tax payable on rebate play is 10 per cent, while for non-rebate play, or for residents, the duty is significantly higher.
Andrew Power, general counsel The Star Sydney at the hearing on Monday.
The inquiry heard Power requested an urgent stocktake in September 2020 of players who had been gambling on rebate programs after it was identified that international rebate play was still occurring at The Star despite Australia’s borders being shut.
“My initial concern was that if borders were shut and people had been here for longer than they were otherwise entitled to be considered not normally a resident of NSW then we may have underpaid duty,” Power said.
Treasurer Matt Kean last month said the state government would pursue The Star for any unpaid tax it is found to be owing. “Make no mistake – we will chase every dollar that is owed to the taxpayers of NSW if any misconduct has occurred,” he said.
The royal commission style probe was triggered by reporting in The Sydney Morning Herald and The Age, exposing money laundering, criminal infiltration and wide-scale fraud at the Pyrmont casino.
In August 2020, the regulator launched an audit flagging 14 individuals of interest and concerns about their proof of residency. The Star subsequently reviewed its policy for some international players.
Counsel assisting the inquiry Naomi Sharp, SC, asked Power if he believed there had been a failure to adhere strictly to the rebate procedure.
“There may have been some examples that I had been made aware of where the [procedure] hadn’t been strictly followed, yes.”
Power completed his second day of evidence to the inquiry, which has previously heard notorious junket operator Suncity continued running a private gaming salon at the casino for more than a year after evidence of dirty cash dealings emerged.
The general counsel earlier denied that he tried to sanitise or “water down” a risk report about Suncity with annotations striking out references to suspected money laundering and non-compliance.
He rejected claims he conspired with senior executives to play down allegations that junket group Suncity was linked to organised crime.
“I don’t believe it was watered down … I don’t believe it was a highly sanitised version,” Power told the hearing.
The inquiry has previously heard the first version of the report, delivered in October 2020, was highly critical of the way the Star had handled its relationship with Suncity, in particular its response to suspicions that it was using the casino to launder money.
“You see, what you’re doing there is directing the removal of criticism of the process, aren’t you?” Sharp said.
Power also rejected that he falsely presented business advice about dealing with Suncity’s operator Alvin Chau as legal advice to keep it from the regulator.
Sharp suggested one email he sent to the casino’s due diligence manager in December 2020 was “seeking to cloak a document in legal privilege so that it is immune from production to the regulator.”
“I don’t agree,” Power said.
Revelations at the inquiry triggered the resignation of the chief executive Matt Bekier last month and the lodging of a class action by investors who claim they were misled about the casino’s compliance with regulatory obligations.
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