The Star Entertainment Group Ltd (ASX: SGR) share price is trading higher this afternoon despite a regulator finding the company is unfit to hold a casino licence in New South Wales.
The company's shares came out of a trading halt just after 2pm, with the share price immediately leaping 4.14% to $2.77 at the time of writing.
Earlier today, the NSW Independent Casino Commission (NICC) released a report finding the casino operator repeatedly breached the law, misled banks, and was infiltrated by criminal activity over many years.
The NICC appointed Adam Bell SC to conduct a review into Star's NSW casino operations in September last year.
As a result of the findings, the report said:
The NICC has issued The Star with a show cause notice and is considering its options for disciplinary action in response to Bell's findings and recommendations
Star Entertainment issued a statement this afternoon, saying it intends to respond to the notice within 14 days. It says it is currently considering the report and the matters raised in the notice.
The NICC investigation followed allegations of criminal activity including money laundering and organised crime, as reported by Nine Entertainment Group publications.
NICC chief commissioner Philip Crawford commented on the report's findings (as quoted by WA Today):
The report is, quite frankly, shocking. It provides evidence of an extensive compliance breakdown in key areas of The Star's business. Not only were huge amounts of money disguised by the casino as hotel expenses, but vast sums of cash evaded anti-money laundering protocols in numerous situations, most alarmingly through Salon 95 – the secret room with a second cash cage.
Star shares were halted yesterday at $2.66 apiece amid rumours today's report would be scathing of the company.
Meantime, a separate independent review is underway into Star's Queensland casino operations.
Star Entertainment share price snapshot
Shares in Star Entertainment are down 28% year to date and 38% over the past 12 months.
The company's current market capitalisation is $2.53 billion.
