The Federal Court has handed down a significant ruling against The Star Entertainment Group, imposing a penalty of AU$260 million (approximately $182 million) for violations of Australia’s anti-money laundering and counter-terrorism financing (AML/CTF) laws. This judgment, delivered by Justice Moore and made public on Wednesday, follows extensive investigations into the casino operator's operations in Queensland and New South Wales, involving both state and federal regulatory actions.
Justice Moore's findings highlighted major compliance failures by The Star, stating that the company “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 identified serious issues such as insufficient customer identity verification, inadequate due diligence, and a lack of ongoing monitoring of customer activities.
Significantly, The Star allowed third party transactions without recording identities, and continued providing access to private gaming rooms despite observed suspicious activities. These shortcomings impeded AUSTRAC and law enforcement’s capability to effectively track illicit funds and disrupt criminal activity.
The court noted that over 1,200 customers were permitted to gamble through “high-risk channels” without adequate AML/CTF protections. Furthermore, The Star's revenues connected to junket operations exceeded $1.4 billion, with junket profits pre-Covid surpassing $100 million. The company estimated that approximately $1.33 billion was generated from high-risk customers between November 2016 and November 2022. Justice Moore indicated that while these figures demonstrate the lucrative potential of non-compliance, they do not directly quantify profits from illegal activities.
AUSTRAC, the federal body overseeing financial intelligence regulation, characterized the violations as systemic and severe. Chief Executive Brendan Thomas remarked that the penalty reflects the gravity of the contraventions and builds on earlier state and Commonwealth fines to emphasize ongoing deterrence. He criticized The Star for not only failing to conduct the requisite checks but for allowing high-risk customers to gamble without establishing the source of their funds, prioritizing profit over compliance.
Thomas described The Star’s operations as akin to a “private casino within its casino,” where insufficient oversight allowed continued access for excluded customers and junket operations despite recognized risks. He reiterated AUSTRAC's commitment to not tolerating companies that prioritize profit at the expense of community obligations.
This ruling is part of ongoing scrutiny faced by The Star, which has experienced several legal challenges over the years. In 2022, as part of civil proceedings initiated by AUSTRAC, two former senior executives of The Star were found in violation of the Corporations Act 2001, due to their failure to manage and report money-laundering and criminal activity risks.
While AUSTRAC suggested fines could extend to $400 million following the civil proceedings, Justice Moore asserted that the imposed penalty of $260 million took into account the previous fines totaling $200 million already paid by The Star, alongside license suspensions and an externally appointed manager.
In recent developments, the New South Wales Independent Casino Commission extended The Star Sydney’s casino license until summer 2027, with Nicholas Weeks remaining as the external manager. Although progress was acknowledged, the NICC attributed responsibility for the extension to The Star's parent company. Conversely, The Star Gold Coast faced a harsher outcome, with its license suspension deadline extended until 2027 based on recommendations from Weeks.
