Historical staff underpayment

Reeling from ongoing pandemic-related lockdowns, a regulatory investigation, and depressed corporate activity, Australian gambling giant The Star Entertainment Group now has to shell out AU$13m ($9.2m) to affected employees after an internal wage review uncovered historical staff underpayment.

Australian investment platform Superhero shared the news via Twitter after The Star admitted Monday it had underpaid around 2,200 employees over a six-year period:

While the Brisbane-based firm might have to pony up a substantial fee, it at least salvaged some reputation by discovering the underpayments internally. The Star said Monday that it had informed the Fair Work Ombudsman and the United Workers Union of its planned remediation to affected employees at its flagship The Star Sydney casino resort.

Ahead of releasing its half-year report on February 17, The Star said it anticipates a statutory net loss of up to AU$75m (US$53.2m).

Coming clean

According to Australia’s The New Daily, The Star uncovered its debt after completing a six-year wage review of its Sydney casino employees. The Star’s Marketing Director Matt Bekier apologized to workers affected by the payment shortfall, stressing that his firm was “committed to doing the right thing by acting transparently.”

Bekier added:

Our priority is to address this issue and to ensure that it doesn’t happen again.”

The Star said that it has now “improved its processes, systems, and training and has a plan in place to ensure salaried team members’ pay is correct moving forward.”

The AU$13m ($9.2m) total includes back pay, interest, and superannuation contributions to The Star Sydney staff. It will add additional pressure to the casino operator already bracing itself for COVID-19-impacted fledgling financials. Its biggest challenge is the impact international border restrictions are having on its casinos in New South Wales and Queensland.

Takeover woes, broadened probe

The Star has faced recent issues outside of just operational challenges. In May, the operator made a merger offer for casino giant Crown Resorts of 2.68 of its shares for each Crown share. In July, however, The Star withdrew its interest in Crown, with rival bidders driving the stakes too high.

The Star is also under investigation by the Australian Transaction Reports and Analysis Center (AUSTRAC) for breaches of anti-money laundering and counterterrorism rules. According to Reuters, AUSTRAC broadened the scope of its investigation into The Star last month to “include multiple entities under the company.”