Mr O'Neill is continuing his testimony at a royal commission style inquiry examining whether the gaming company is fit to keep its Sydney casino licence.
The inquiry is probing the ASX-listed company after allegations emerged it enabled suspected money laundering, organised crime, fraud and foreign interference at its venues, including The Star Sydney.
Many of Star's top brass, including managing director and chief executive Matt Bekier, chief financial officer Harry Theodore, chief casino officer Greg Hawkins, and chief legal and risk officer Paula Martin have left in recent months.
Mr O'Neill, who tendered his resignation as chairman last week, told the inquiry Ms Martin was a hard working person but said the company asked too much of her to cover "the full suite of responsibilities" of legal and risk oversight.
Ms Martin had up to nine people reporting to her and did not have enough of a background in risk and compliance, he said on Tuesday.
"It was a fundamental mistake by the company to combine the two roles," he said.
He pointed to casino compliance manager, Graeme Stevens, and general manager of financial crime and investigations, Kevin Houlihan, as people in critical positions who were promoted into "bigger and bigger" roles at Star.
"With the benefit of hindsight the organisation should have given more thought to training and upskilling them for that role, or do a search in the broader market place for people with a particular skill-set in those areas," he said.
Mr O'Neill has told the inquiry parts of the company's business went very badly wrong, especially its international rebate and VIP divisions related to junkets, China Union Pay and offshore bank accounts.
The inquiry was previously told that in 2019, China Union – a Chinese financial services company – became concerned that its cards were being used at Star venues to pay for large "suspicious" gambling transactions in breach of its rules.
Mr O'Neil has also admitted Star was not good enough in dealings with regulators AUSTRAC and the NSW Independent Liquor and Gaming Authority.
The inquiry continues before Adam Bell SC.
