By Byron Kaye and Renju Jose
SYDNEY (Reuters) -Australia's Queensland state said it will investigate whether to let the country's No. 2 casino operator Star Entertainment Group Ltd keep its gambling licence amid money laundering concerns, putting a cloud over the company's main growth plan.
After an inquiry in a neighbouring state accused Star of allowing breaches of anti-money laundering protocols at its Sydney resort, Queensland said on Tuesday it would also review the company's suitability for a licence.
If that inquiry finds Star unsuitable, it would likely disrupt the company's plan to open a A$3.6 billion ($2.5 billion) casino resort in central Brisbane as planned in 2023.
A separate inquiry into alleged breaches of anti-money laundering and counter-terrorism laws at the company's casino in Sydney, capital of New South Wales (NSW) state, is yet to deliver its final report. Star chief executive officer Matt Bekier resigned in March amid that investigation.
Queensland Attorney-General Shannon Fentiman said previously disclosed investigations into Star by the state's police and casino regulator were ongoing, but "there will also be an independent expert review into the suitability of The Star to keep its casino licence".
The state would publish the scope of that review later, Fentiman added.
Star said it would "fully cooperate with any review".
Australia's casino sector has been under intense scrutiny since media articles in 2019 accused Star's larger rival Crown Resorts Ltd of wide-ranging misconduct including failure to stop money laundering by foreign criminals in its premises.
That resulted in findings that Crown was unfit for a licence in the three states where it operates. It was allowed to keep taking bets, under government supervision, in the two states where it already had functioning casinos, but a new resort in Sydney has not been allowed to take bets since opening in 2020.
The NSW regulator launched a separate inquiry into Star after new media reports accused the company of compliance shortcomings, which it denied.
Star's profit is divided roughly between its casinos in Sydney and the Queensland cities of Brisbane and the Gold Coast.
Star shares closed down 6% on Tuesday, against a 3.8% decline on the broader market.
($1 = 1.4422 Australian dollars)
($1 = 1.4353 Australian dollars)
(Reporting by Renju Jose; editing by Stephen Coates)