Loophole makes illegal financial transaction possible at star casino

Phillip Dong Fang Lee who splurged $11m in a day at Star Sydney

A Chinese-born Australian businessman reportedly gambling $11 million in one day at Star Sydney, an inquiry into the casino operator has heard. The Daily Telegraph reports that Sydney-based Phillip Dong Fang Lee told the Star investigation board that the casino advised him to open an account with a bank in Singapore, which he visited in person to deposit cash, then to sign a blank cheque from the institution so that he could get $5 million to bet at the casino.

The periodic inquiry under the Casino Control Act examines whether Star Casino Sydney remains fit to hold a license in NSW. Mr. Lee told the inquiry that he was “pleased” when a Star relationship manager informed him he could use a China UnionPay card to buy chips and pay his debts at the casino. Counsel assisting the inquiry, Naomi Sharp SC, asked Mr. Lee why he was thrilled.

He replied: “Because I do not have money in Australia. In China, I could borrow money, and so if I won, certainly that’s an excellent opportunity. “However, if I lost, I could repay because in China I have friends who I know well, and I could borrow…and in Australia, it’s tough to get and borrow money,” Mr. Lee said. Later, Ms. Sharp asked Mr. Lee: “Is it true that on April 6 2015, you debited your China UnionPay bankcard for $11 million to buy casino chips or pay back a casino debt at The Star casino?”

Multiple debits made in a short space of time

He agreed that as part of the $11 million, six debts of $900,000 each occurred within the space of four minutes at about 10.45 pm on April 6.Mr. Lee was also shown a Star document that said he stayed at the casino hotel for 27 days in April 2015. However, he said he had not stayed at the hotel.

Mr. Lee said he opened the account with the Singapore bank account after The Star told him his National Australia Bank cheques were “no good” and that the “casino rules had changed.” “They explained to me they would need an overseas check,” he said. “It would be a blank cheque, and I was requested to sign the blank cheque and hand it back to them so that they would handle the rest of the procedure, and then it would be okay for me to get an amount of money of around $5 million, and with that money I could gamble in a casino, and if I lost, I have one month to pay back.”

Mr. Lee said he went to Singapore to deposit the cash in the account. He said he had to show the Singaporean bank where the cash had come from. After Mr. Lee finished giving evidence, Star’s compliance manager Graeme Stevens appeared before the inquiry.

Star inquired about inaction

Ms. Sharp asked him if he was aware that before December 2018, a section of the Casino Control Act prohibited a casino in connection with gaming from providing money or chips as part of a transaction involving a credit or debit card. “It did, yes,” Mr. Stevens replied.

The inquiry then heard UnionPay prohibits the purchase of gambling chips. This had been indicated in external legal advice sent to Mr. Stevens and other Star executives in 2013 prior to a meeting between The Star and the NSW Independent Liquor & Gaming Authority that covered UnionPay cards. Mr. Stevens had earlier said he wasn’t aware of the ban when meeting with ILGA. However, after being reminded by Ms. Sharp of the legal advice sent to him, which he said he believed he had read at the time, Mr. Stevens remarked: ” I should have been more aware of that becoming a problem.”

Adam Bell SC, who is conducting the inquiry, asked Mr. Stevens if he accepted he should have told ILGA about the ban. “Yes,” Mr. Stevens said. Questioned about why he didn’t, Mr. Stevens said: “I don’t have an explanation for that.” Mr. Bell asked Mr. Stevens if it was a “very grave” error not to tell the regulator. Mr. Stevens agreed that it was.

He then agreed that later in 2013, after the meeting with ILGA, he was sent emails that explained a “workaround” for the UnionPay card ban where transactions were run “through the hotel” so they are not breaching the card rules. Under the workaround, the hotel purchase was later redeemable at a gaming table.