China Union Pay debit cards were used to purchase gambling chips at The Star casino in Sydney for several years, in prohibition of the card issuer's rules.
Formerly Star's main point of contact with NSW regulators, current group compliance manager Graeme Stevens knew they were being used to gamble but he says the first he heard of it being prohibited was at the start of an inquiry into whether the casino should keep its licence, which he appeared at on Thursday.
He was then presented with several documents dating to 2013 suggesting otherwise: that in fact The Star knew the cards were not to be used for gambling and sought to get around that.
He said he "would like to say" it was not a deliberate decision that submissions to the regulator seeking to change the acceptance of electronic funds transfers made no mention of CUP cards.
But he conceded it was at least "a very grave error".
The inquiry earlier heard how CUP transactions could be disguised as hotel accommodation charges and then money from those accounts transferred into front accounts allowing patrons to gamble.
Earlier on Thursday, Chinese-born Australian property developer Phillip Dong Fang Lee resumed his evidence through an interpreter.
He was taken through documents bearing his signature, showing he used CUP cards linked to bank accounts in China for numerous transactions totalling $11 million.
A relationship manager at The Star informed him he could use CUP cards.
They would take his card and swipe it for him and return to the table with chips.
The document containing the transactions and his signatures, which Mr Lee said he was seeing for the first time at the inquiry, was linked to a 27-day stay in room number 9098 in April 2015.
Mr Lee said he did not stay at the hotel during that time and would stay at his Sydney home when he gambled at The Star.
Mr Stevens said in his role as Star's NSW regulatory affairs manager since 2006 he understood the circumstances in which the casino could provide credit to patrons was limited, and usually depended on a personal cheque being provided by the patron.
There was also a capacity for The Star to generate "counter cheques", which Mr Stevens told the hearing the casino had been generating for customers since it opened in 1995.
Those cheques were issued to, among others, patrons who paid with CUP debit cards to allow them to gamble before the money had reached The Star.
It was a workaround high-level decision makers at Star had sought because the NSW Independent Liquor & Gaming Authority dictated The Star would have had to wait for the funds to clear into its account before issuing chips, which could take up to 72 hours.
Group general counsel Oliver White, due to face the inquiry next week, had explained to Mr Stevens how this meant "we weren't technically giving credit as would be otherwise understood in the casino industry".
Despite being the main point of contact for NSW regulators during the relevant period, Mr Stevens conceded he would not have been able to explain the process to them and how it complied with legislative requirements.
He was told to review standard operating procedures for cage operations that began in September 2013 and return to the hearing on Friday to explain "where, if anywhere it discloses what the process was with (CUP)".
Eight more Star managers, officers and lawyers are scheduled to give evidence before the inquiry concludes hearings on April 1.
