Casino gave gamblers free cash – then reported them for fraud

Casinos are generally places where punters lose money. For two glorious weeks in the middle of last year, customers of The Star, Sydney casino – along with their friends, relations and acquaintances – pulled out fistfuls of cash from the only sure bet in town.

Four “ticket in, cash out” machines had malfunctioned, and word got around. They came in their dozens: criminals, gambling addicts, even a few homeless people. By the time the casino noticed anything was amiss, $3.2 million had walked out the door.

Thanh Lan Le’s gambling addiction relapsed after she took advantage of the free cash being churned out by a machine at the Star.

“Ticket in, cash out”, or TICO, machines are ATM-style kiosks that convert a player’s winnings into cash by reading the barcode on a voucher that the player has obtained from his or her poker machine.

They are a known money-laundering risk because they can legitimise dirty cash without players needing to engage in human interaction. Casinos mitigate this risk by programming the machines only to accept tickets with winnings of up to $2000. For greater amounts, people need to visit a cashier.

One afternoon in early July, Thanh Lan Le went to The Star to meet a friend.

A recovering gambling addict, Le had been on the wagon for eight months and did not intend to visit the gaming floor that day. But she ran into her friend’s boyfriend, and his eyes were alight with wonder.

“Look what I’ve found, look at this, am I tripping?” he said, according to Le, and placed two vouchers into a TICO machine. The machine accepted both tickets and spat out their combined winnings in cash.

Then, as Le and the boyfriend watched, the machine returned one ticket worth about $2000. He put it in the machine again and pulled out an additional $2000.

A software malfunction meant that when a player inserted more than one ticket into the TICO machine, it would return one of the tickets along with the cash, allowing the ticket to be used again and again.

Le was hooked. For the next 10 days, she moved between machines on the gaming floor, visiting the malfunctioning machines to fund her playing on 34 separate occasions. Twice, she fell asleep at her machine, she said. Twice, casino staff offered to book her a room upstairs, which she accepted, paying with money she had fraudulently obtained from the casino’s own TICO machines.

She withdrew $57,265, all but $5000 of which was spent at the casino.

“I was in this trance,” she said. “I’m really annoyed with myself. All that work I’d done with my psychologist was out the window.”

But at some point, she looked around and came to her senses. The number of people using the TICO machines had swollen, and the floor was milling with rough-looking individuals. She got out.

An inquiry into The Star, Sydney casino this week heard that 43 people used the faulty machines to withdraw a combined $3,219,420 over 13 days. Numerous failures, human and technological, prevented the casino from detecting the glitch for six weeks after the fault occurred during a software update.

The players had cottoned on two weeks earlier.

The Star, Sydney special manager Nick Weeks told the inquiry called by the NSW Independent Casino Commission that the non-detection was “a very significant failure across a large number of people and teams” and demonstrated an absence of leadership at the casino.

Nick Weeks was appointed to The Star by the NSW Independent Casino Commission on the day the casino was stripped of its licence in 2022.

The inquiry also heard that The Star’s head of investor relations, Giovanni Rizzo, subsequently asked the chief financial officer to doctor the books to hide the loss when the business presented its half-year results in February. Former chief financial officer Christina Katsibouba told the inquiry she did not comply.

But not in evidence was the fact that the casino subsequently reported its customers to the police, who arrested Le and others in the weeks after the issue was detected.

Among those charged was Troy Manning, 40, who is in jail awaiting trial on charges of fraud, participating in a criminal group, and knowingly dealing with the proceeds of crime.

Le has pleaded guilty to a single charge of honestly obtaining property by deception and offered to repay the money. Her gambling addiction has relapsed.

“I understand it was my fault,” she said. “I had deceivingly taken it, but the machine was giving us money.”

But her solicitor, Natalija Nikolic of XD Law, said the episode would never have occurred if The Star reconciled its tickets and payouts daily in accordance with anti-money laundering provisions.

“They run a system that seems to pay little regard to the licence standard expected of them,” Nikolic said.

“They were giving away $3 million and didn’t even notice – a system so evidently lax that it is a honeypot for money launderers. In our view the worst offending in this whole scenario could be laid at the feet of Star for these negligent breaches.”

Former ClubsNSW anti-money laundering compliance manager Troy Stolz, who was drafted to give expert testimony for Le, said venues that operate TICO machines were required by law to apply closer scrutiny of their customers through CCTV footage, additional roaming staff and monitoring transactions, and The Star had failed to do so.

“This also raises questions around the robustness/effectiveness of the Star Casino’s AML/CTF [anti-money laundering/counterterrorism financing] program,” he said in a letter addressed to the presiding magistrate.

Star said it was inappropriate to comment on criminal matters while they were before the courts. The inquiry into the organisation’s culture continues.

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