The Federal Court of Australia has ordered The Star Entertainment Group to pay AU$260 million ($182 million) for breaches of anti-money laundering and counter-terrorism financing (AML/CTF) laws.
The amount is below the AU$400 million ($280 million) that the Australian Transaction Reports and Analysis Centre (AUSTRAC) had suggested. Justice Moore set the penalty after she took into account AU$200 million ($140 million) in previous penalties, license suspensions and the appointment of an external manager.
AUSTRAC Chief Executive Brendan Thomas said that “the penalty reflects the seriousness of the contraventions and builds on previous state and Commonwealth fines to provide ongoing deterrence value.”
Justice Moore’s judgment concludes lengthy civil proceedings. It follows extensive investigations and regulatory actions at state and Commonwealth levels into the casino operator’s activities in Queensland and New South Wales.
Court cites gaps in customer checks
Justice Moore found that The Star “failed to maintain a compliant AML/CTF programme and failed to monitor customers to identify, mitigate and manage money laundering and terrorism financing risks.”
The court found that the company did not adequately verify customer identities or the sources of their funds. It also determined that The Star’s due diligence and ongoing monitoring of customer activity were insufficient.
The Star accepted transactions and cash deposits from third parties without recording who they were. Customers also kept access to private gaming rooms even after suspicious activity had been observed.
According to the court, these failures hindered the ability of AUSTRAC and law enforcement to track illicit funds and disrupt criminal activity. The court also stated that over 1,200 customers were allowed to gamble via “high-risk channels” without adequate AML/CTF safeguards.
Junket revenue surpassed AU$1.4 billion
Revenue linked to junket operations exceeded AU$1.4 billion ($980 million), and pre-Covid junket profits surpassed AU$100 million ($70 million).
The Star’s own estimates placed revenue from high-risk customers between November 2016 and November 2022 at approximately AU$1.33 billion ($931 million).
Justice Moore said these figures “illustrate the potential to earn profits from a noncompliant approach.” She added that they do not directly quantify the benefits derived from illegal conduct.
Regulator describes a ‘private casino within its casino’
AUSTRAC, the federal body responsible for financial intelligence regulation, described the breaches as systemic and severe.
Thomas pointed to The Star’s failure to clearly define the flow of revenue during play.
“The court found The Star did not simply fail to complete the right checks. It allowed high-risk customers to gamble without properly establishing where their money came from and put profit over compliance on a large scale,” Thomas said.
He criticized the company for operating a “private casino within its casino” with insufficient oversight. According to Thomas, this arrangement facilitated continued access for excluded customers and enabled junket operations despite known risks.
“We will not tolerate companies putting profit over their obligations to the Australian community,” Thomas said.
Executive rulings and license decisions
The Australian Securities and Investments Commission (ASIC) brought civil proceedings in 2022 against former directors and officers of The Star Entertainment Group. In that case, the Federal Court found that two former senior executives had breached the Corporations Act 2001. The court linked these breaches to failures in managing and reporting money laundering and criminal activity risks.
Last month, the New South Wales Independent Casino Commission (NICC) announced that the suspension of The Star Sydney’s casino licence would continue until June 30, 2027.
Nicholas Weeks will remain external manager until that date. The NICC acknowledged the steps The Star Sydney has taken toward progress, but it said the parent company was to blame for the extension.
A few hundred kilometers north, The Star Gold Coast received a contrasting verdict. Its license suspension deadline was pushed to March 31, 2027, a decision that followed advice from Weeks.