The Star Entertainment Group has been hit with a significant penalty of AU$260 million ($182 million) by the Federal Court, marking a critical decision in response to violations of Australia’s anti-money laundering and counter-terrorism financing (AML/CTF) laws. This ruling, articulated by Justice Moore, stems from exhaustive investigations and regulatory scrutiny at both state and federal levels concerning The Star's operations in Queensland and New South Wales.
In her findings, Justice Moore stated that The Star had suffered from severe compliance shortcomings, indicating that the company “failed to maintain a compliant AML/CTF program” and neglected to adequately monitor customer activities to mitigate and manage risks related to money laundering and terrorism financing.
The court identified various breaches by The Star, including insufficient verification of customer identities and sources of funds, along with inadequate due diligence and ongoing monitoring of customer gambling activities. Notably, the casino permitted transactions and cash deposits from third parties without documenting their identities, and allowed continued access to private gaming rooms despite observing suspicious behavior.
These compliance failures significantly impaired AUSTRAC and law enforcement’s efforts to trace illicit funds and combat criminal activities effectively. The court revealed that over 1,200 customers were able to gamble through “high-risk channels” without appropriate AML/CTF protections in place. Furthermore, revenue tied to junket operations exceeded $1.4 billion, with profits from pre-Covid junkets surpassing $100 million. The Star's own estimates indicated that revenue from high-risk customers from November 2016 to November 2022 amounted to around $1.33 billion. Justice Moore noted that while these figures demonstrate the potential for profit from a non-compliant stance, they do not directly quantify any earnings derived from unlawful activities.
AUSTRAC, the federal agency overseeing financial intelligence, characterized The Star's breaches as both systemic and grave. AUSTRAC Chief Executive Brendan Thomas reflected on the penalty, stating it underscores the seriousness of the violations and builds on previous fines from state and federal authorities to deter future misconduct. He criticized The Star for failing to establish a clear flow of revenue from gambling activities, asserting that the casino did not ensure high-risk customers' money sources were verified and prioritized profits over compliance on a large scale. Thomas condemned the situation as The Star operating a “private casino within its casino,” illustrating a lack of oversight that enabled excluded customers and junket operations to persist despite known risks. He remarked, “We will not tolerate companies putting profit over their obligations to the Australian community.”
This recent penalty is part of an ongoing series of legal and regulatory challenges for The Star Entertainment Group. Following civil proceedings initiated by AUSTRAC in 2022, two former senior executives were found by the Federal Court to have violated the Corporations Act 2001 due to lapses in managing and reporting money-laundering risks.
While AUSTRAC had proposed fines potentially reaching $400 million, Justice Moore clarified that the imposed penalty of $260 million took into account the previous $200 million in fines already settled by The Star, as well as the license suspensions and the appointment of an external manager. Just recently, the New South Wales Independent Casino Commission (NICC) extended the casino license of The Star Sydney through summer 2027 with Nicholas Weeks continuing as the external manager, acknowledging the steps The Star Sydney has taken toward compliance. In contrast, The Star Gold Coast had its license suspension deadline extended until 2027, following an evaluation from Weeks.
