Star Casino in Sydney Gave Away Millions in Cash Due to a Software Bug

Star Casino made the news in July 2023, and it wasn’t for a good reason. The Australian Casino powerhouse paid out millions in cash to players in error. For such a notable player in the gambling industry, this may surprise anyone reading about the incident. However, these things do happen.

The company’s commitment to delivering sustainable outcomes to customers and players means they spend hundreds of millions in cyber security annually. So, what could have gone wrong? A software glitch in the system saw the casino inadvertently give away a whopping $2 million to different players.

Again, glitches happen no matter how much security you put in place. However, what’s more annoying, according to Nick Weeks (Star Casino Manager), is the fact that the malfunction was undetected until several weeks later. He called it “a very significant failure across many people and teams,” which is precisely what it is.

How Did It Happen?

According to reports, the glitch happened after a software update initiated by the casino. So, the team was supposed to monitor the system for bugs. However, it’s either that it didn’t happen, or someone missed it. The update was for the casino’s “ticket in, cash out” (TICO) machine. These are similar to regular automated teller machines (ATM), where you insert your card to withdraw money.

In the case of the TICO machines, the customers insert a winning voucher with a unique barcode to convert their winnings to cash. So, rather than take the ticket to a human cashier, you just use the machine and get your winnings super-fast and easy.

Just like in most Australian online casinos, there was a limit on transactions. The withdrawal had a maximum cap of $2000. However, words spread pretty fast. Once some people discovered the glitch, they shared it among friends, and an estimated 43 people took advantage of it. A whopping $2.05 million (AUD 3.2 million) was gone in just a few weeks. How did that happen, especially unnoticed?

A typical TICO machine allows a player to insert two winning vouchers simultaneously if the total amount does not exceed the $2000 cap. However, due to the system bug, the machine paid for both tickets and returned one to the customer, which could be reused.

At first, small amounts were paid out. Later on, the bug allowed for dispensing of a larger sum, and reports indicated that 43 persons exploited the situation.

The Customers

As words spread about the glitch, all roads led to Star Casino. Gambling addicts, homeless, and all manner of people made up the “43”. However, one customer that stood out was Than Lan Le.

During her briefing with the Sydney Morning Herald, she recounted how she had been on a remarkable self-exclusion journey away from gambling addiction. But all of that changed when her boyfriend broke the news to her.

Of course, who wouldn’t want some free cash? She repeatedly used the TICO machine for ten days at the Star Casino. Le stated that she used the machine 34 times, withdrawing a total of $57,265. “I was in this trance,” she said, as she spent and lost $52,265 at the same casino.

She literally lived inside the casino playing poker and different games. It was reported she fell asleep many times at the table and was ushered into the hotel room, which she financed from the same money.

The Response from Star Casino

This should never have gone undetected, even for a few hours. But for it to last weeks, that was totally unacceptable. Eventually, after the glitch was uncovered, the casino traced the records and reported all 43 customers to the police.

Of all that was arrested, Thanh Lan Le’s case stood out. She eventually pleaded guilty to obtaining money unlawfully by deception. Although she had already lost all but $5000 after she relapsed, she offered to repay the money.

Beyond the customers who took advantage of the glitch, the incident was an eye-opener for Star Casino. It revealed the poor control culture and lackadaisical attitude of the employees and teams responsible for supervising and ensuring compliance with existing control measures. The company could have easily been tagged as the worst offender in this scenario for such negligent breaches that could result in money laundering and other related offenses.

Implications For Star Casino

The gambling industry is very highly regulated. So, besides the financial implications of the glitch, there are also regulatory and industry-related consequences. The casino could face significant sanctions and penalties from different license holders.

Many fresh inquiries are bound to come up, especially as the company was perceived to have fallen short in many of its corporate responses to address the issues. This is not the first time the casino has faced cases of money laundering or hit the gambling news headlines for the wrong reason. In 2022, the Star Entertainment Group was fined a whopping $100 million on allegations of indulging in money laundering

According to the spokesperson for the New South Wales Independent Liquor & Gaming Authority, an independent investigation will be conducted into the incident. This comes even after numerous reviews of the company’s practices, with their license almost always hanging on the balance. While the report from Adam Bell in September 2022 was troubling, the regulator considered a different approach rather than revoking their license.

The aim was to prevent thousands of Star Casino employees from losing their jobs overnight. Instead, an external manager was appointed to oversee the casino’s operations. Many analysts continue to raise eyebrows, questioning the privileges the casino is enjoying despite not being fit to run. All of these happened before the glitch, affirming Bell’s early reports.

Future Outlook

Indeed, there are numerous positives to take from the entire incident. However, the recovery process might take longer than expected, significantly depending on the level of sanctions from the regulators. The bug could have been detected sooner. There is an obvious decay in the company’s overall control system, which must be fixed.

By GamesAndCasino