The long-running NSW gaming regulator inquiry is looking at whether the Sydney gaming facility is fit to hold a casino licence after media claims of organised crime, fraud and foreign interference at the venue.
Lawyers assisting the inquiry have argued that The Star Sydney is not fit to hold the licence but the legal team for Star Entertainment, which owns the casino, contends it is a suitable entity following a clean-out of senior management.
In reply submissions on Monday, counsel assisting, Naomi Sharp, took issue with Star's claim that its China Union Pay card scheme did not involve "significantly elevated risk from a money laundering and counter-terrorism financing perspective".
"We submit that that submission is somewhat difficult to reconcile with the apparent concession that no source of funds checks were conducted," Ms Sharp told the inquiry.
A central issue has been the casino's deployment of CUP cards, with the inquiry previously told problems with the process included sham documents, the misleading of banks and regulators, and a possible breach of casino control laws.
About $900 million was transacted on the cards before the scheme, which disguised gaming chip purchases as hotel charges, was shut down.
Ms Sharp pointed to billionaire high-roller Phillip Dong Fang Lee, the casino's largest user of the CUP process, whom she said was on some occasions issued with a cheque by the casino when his swipes did not match his level of play.
"The effect of that process ... is that the cheque gave the appearance that Mr Lee had obtained his money from the casino when in fact the source of funds was a bank account in China, being the one linked to the CUP card," she said.
Another money laundering risk was the "obfuscation" associated with the CUP process, especially related to regulators and law enforcement , Ms Sharp said.
Authorities looking at the CUP transactions "from the outside" were led to believe the funds were linked to a hotel and not for the purchase of gaming chips.
"There is that level of obfuscation involved in that process," she said.
The casino and Star were also aware "from the earliest times" that the CUP payment channel was a means to avoid rules on currency flight from mainland China, she said.
The inquiry continues before Adam Bell SC.
