Star Entertainment Ordered to Pay AU$260M for Serious AML Breaches

SYDNEY, Australia – The Federal Court has ordered The Star Entertainment Group to pay AU$260 million for serious anti-money laundering breaches. The penalty adds to the casino operator’s financial burden as its properties in Sydney and Queensland remain under regulatory scrutiny.

The October 28 ruling follows enforcement proceedings brought by Australia’s financial intelligence regulator, AUSTRAC, in 2022. The court found that Star failed to maintain compliant anti-money laundering and counter-terrorism financing (AML/CTF) controls and inadequately monitored customers who presented significant financial crime risks.

Star Allowed More than 1,200 High-Risk Customers to Gamble

According to AUSTRAC’s official announcement, the casino operator failed to adequately verify customer information, establish the source of funds and conduct appropriate due diligence. More than 1,200 customers were permitted to gamble through channels associated with elevated money laundering and terrorism financing risks.

The failures included inadequate oversight of junket operators, third-party transactions and cash deposits where the identities of those providing the money were not recorded. Star also allowed a private gaming operation to function without appropriate controls and continued dealing with customers who had been excluded from gambling in another state.

AUSTRAC CEO Brendan Thomas said the findings demonstrated that the operator had prioritized revenue over its legal obligations.

The court also examined the financial scale of the activities involved. Junket operations generated more than AU$1.4 billion in revenue, while revenue from high-risk customers between November 2016 and November 2022 reached approximately AU$1.33 billion, according to Star’s calculations.

Justice Cameron Moore said those figures illustrated the financial incentives associated with inadequate compliance, although they did not represent profits directly attributable to the breaches. The failures also hindered authorities’ ability to trace suspicious funds and investigate potential criminal activity.

Court Weighs Previous Penalties and Financial Pressure

The AU$260 million penalty follows approximately AU$200 million in earlier penalties imposed after casino inquiries in New South Wales and Queensland. Justice Moore considered those sanctions, alongside Star’s suspended licenses and ongoing independent oversight, when determining the latest penalty.

The court allocated AU$195 million to breaches involving The Star Sydney and AU$65 million to the company’s Queensland operations. The amount will be paid in four installments over 19 months, according to the Federal Court judgment reported by ABC News.

The financial consequences remain significant for the operator, which had argued that a penalty exceeding AU$100 million could force it into liquidation. AUSTRAC had sought AU$400 million, but the court determined that the existing penalties, remediation measures and Star’s financial position warranted a lower amount.

The ruling also comes amid continuing concerns about the operator’s ability to regain full control of its casinos. In September, New South Wales regulators extended independent management at The Star Sydney through June 2027, citing unresolved governance and leadership issues despite progress in its remediation program.

Star’s Sydney casino license remains suspended, although gaming operations can continue under independent manager Nick Weeks. Queensland authorities have also maintained regulatory oversight of the company’s Gold Coast property.

The operator must now meet the court’s payment schedule while continuing efforts to address its compliance failures. The AUSTRAC judgment resolves the federal civil penalty proceedings, but decisions on restoring the company’s casino licenses remain with state regulators.

RELATED TOPICS: Regulation