The body of the first casino executive was identified yesterday and dragged out of the fairly sensational public hearings into our wonderfully wretched national casino duopoly.

The revelations oozing out of the hearings in to whether Crown Resort’s (ASX:CWN)  frenemy Star Entertainment Group (ASX:SGR) should retain its own casino licence yesterday led to the unshocking resignation of Star’s chief executive Matt Bekier.

It’s a long game the casinos play – I mean, you’d hope they pick something up from the business. Eddy Sunarto observes Crown Resorts (ASX:CWN) traded higher late last week after a state government-ordered inquiry found the operator unfit for a gambling licence… in WA, where they literally give licences away (Ed: hoho).

However, WA gaming minister Tony Buti said the inquiry recommended Crown just get on and continue operating “under the supervision of a government-appointed monitor”, instead of having its licence revoked.

But only for two years, ‘cos that’s heaps.

The ongoing public hearings have unearthed a goldmine of shonky practices, with widespread evidence drip fed to a largely unconcerned Australian public over the last few weeks. Evidence of what appears to be the endemic flouting of Australian anti-money laundering laws.

The Star was quick to serve Bekier’s head on a platter, saying that while the review remains ongoing, “Mr Bekier informed the board that as managing director and CEO he is accountable for the effectiveness and adequacy of the company’s processes, people and culture”.

Fallen Star: ‘Arrogance. Entitlement and nada credibility’

This is the view so far that has emerged of Star Entertainment Group’s approach to its responsibilities from one of the country’s most respected governance experts, Helen Bird.

A senior lecturer in governance studies at Swinburne Law School and Australian Graduate School of Entrepreneurship, Bird told Stockhead in view of last week’s revelations, both Bekier and in particular Star’s chair of the board, former rugby boss John O’Neill “lack the creditability and confidence required to convince investors that they are the team to overhaul the casino going forward”.

Kicking off earlier this month, the royal commission-style inquiry has been persistently hearing from a range of witnesses detailing allegations of money laundering and just some incredibly poor governance at not only the company’s Sydney casino but at what is a mid-cap listed company.

You can enjoy the live stream here.

Things got funky last week when the inquiry heard that senior Star execs were well aware of some awfully large cash transactions going on in what’s called a junket room, where high-rollers can play – and do other less playful things – behind closed doors.

Because this might be a terrific way to say, launder lots of money, those kind of transactions in those kinds of places is not allowed (I think the word is illegal).

Not getting huge airplay last Friday arvo, despite its stunning impact on the brain after entering the ears: the testimony of Chinese billionaire Phillip Dong Fang Lee.

Not only very wealthy, but clearly a terrible gambler, the Star Sydney high-roller told the inquiry he spent $11 million at the casino in a day.

This, after Star employees already fessed up to some bald-faced lying to the National Australia Bank (not a crime in itself) when the bank was getting daily calls from China UnionPay looking for reassurances that its cards weren’t being used by Chinese nationals and other holders for gambling (also not a crime, but defo not allowed, because, again, money laundering).

Bird told Stockhead (with an audible sigh), that the inquiry now bears all the hallmarks of the Crown Casino hearings of 2020 and 2021.

“When it comes to stakeholders – and there are very many – Bekier and O’Neill have lost the room because of past conduct and the poor workplace culture that their leadership clearly encouraged… I would also argue that board renewal as a whole is required.”

Bird says the Star leadership chose to “demonise reporting of legal compliance concerns”, and then dismissed reports from outside experts, including an unabashed tongue-lashing of KPMG contractors who found widespread concerns.

Brown bags of cash: always a red flag

And not unfounded – on Wednesday the inquiry was shown some fabulously dodgy CCTV footage of staff handling a Macau-based junket operator handing a gambler a brown paper bag full of bundles of cash in $50 pineapples (I remember) he’d cashed out.

However Star’s executives, led by Bekier and O’Neill, rubbished KPMG’s valid concerns.

“The experts were ‘wrong’ because they (Bekier and O’Neill) knew better,” Bird told Stockhead. “The arrogance and sense of entitlement that accompanied these views was palpable at last week’s hearings.”

Bekier is a long standing executive (CFO then CEO) and O’Neill is a long standing chair – the relevance of which is that they were both present in key leadership roles when the activities that were the subject of this week’s hearings were taking place, Bird says.

Bekier’s easing-onto-his-own-sword yesterday came after Bird says he appeared to do everything in his capacity as CEO to hide Star’s law breaking (money laundering) activities.

There are now question marks over his dealings with the regulator too.

So what are the governance takeaways here people?

“Well, lack of candour and arrogance are a start. The outright denial of legal wrongdoing are the antithesis of the social licence that Casinos have to operate.”

This is the same conclusion per Ray Finkelstein, the Commissioner and Chair of the Royal Commission into Crown Casino’s Melbourne operation.

Bird says the state of Star’s casino licence is likely to hang in the balance and will depend on the inquiry being satisfied that real changes are being made and will continue to be made.

And just like the CEO of Crown, Bekier’s situation was untenable.

“Immediate action taken when the allegations came to public light, helped Crown to demonstrate real resolve for change and therefore to remain in business. Star should think about that very carefully,” Bird says.

“O’Neill as board chair arguably demonstrates the well-known failings of governance (poor risk governance – oversight and management of risk) that we have come to expect from Australian casino companies.”

“His failings are ones of omission, of just standing by and letting Bekier’s view point on the money laundering and junket issues be the dominant voice and lead position presented to the Star Board.

“Confidence in his ability to ensure change at Star should be in doubt due to his now illustrated poor judgment.

“At the very least, he should not continue in the role of company chair.

“He may argue from the viewpoint of stability that he should remain in the job until a new CEO & Chair is appointed and the outcomes of the hearing are known.

“That is what Helen Coonan did at Crown.”

And they’re doing ok.