In a significant legal ruling, The Federal Court has imposed a penalty of AU$260 million (approximately $182 million) on The Star Entertainment Group for violations of Australia’s anti-money laundering and counter-terrorism financing laws. This decision, announced by Justice Moore on Wednesday, follows extensive investigations into the casino operator's activities in Queensland and New South Wales.
Justice Moore found that The Star had committed serious compliance failures. The ruling highlighted 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 several breaches, including inadequate customer identity verification and insufficient due diligence in monitoring customer activities. The Star had permitted transactions and cash deposits from unidentified third parties and allowed continued access to private gaming areas despite observing suspicious activities.
These regulatory failings impeded AUSTRAC and law enforcement from effectively tracking illegal funds and disrupting criminal activities. The court revealed that more than 1,200 customers were allowed to wager through “high-risk channels” without proper AML/CTF protections.
Additionally, The Star was linked to junket operations with revenues exceeding $1.4 billion, with pre-pandemic profits from junket activities surpassing $100 million. The company estimated that revenue from high-risk customers from November 2016 to November 2022 stood at about $1.33 billion, reflecting a profit-driven approach rather than a commitment to compliance.
AUSTRAC, the federal agency focused on financial intelligence regulation, characterized these breaches as both systemic and severe. AUSTRAC Chief Executive Brendan Thomas remarked that the AU$260 million penalty underscores the gravity of these contraventions, serving as a deterrent against future violations. He pointed out that The Star failed to properly define revenue streams during play, allowing high-risk clients to gamble without verifying the sources of their funds.
Thomas criticized The Star for running a “private casino within its casino,” which led to inadequate oversight, the continued presence of excluded customers, and the operation of junket activities despite well-known risks, reiterating AUSTRAC’s zero-tolerance policy toward profit-over-compliance practices by companies.
Legal actions against The Star have been ongoing for several years, with AUSTRAC filing civil proceedings in 2022 against the company and two former senior executives, who were found to have violated the Corporations Act 2001 by mishandling money-laundering and criminal activity risks.
AUSTRAC had previously indicated that fines could reach up to $400 million for The Star. However, Justice Moore determined the $260 million figure took into account previous penalties totaling $200 million, along with license suspensions and the appointment of an external manager.
Recently, the New South Wales Independent Casino Commission extended The Star Sydney’s casino license until summer 2027, with Nicholas Weeks continuing as the external manager. Despite acknowledging the measures taken by The Star Sydney towards compliance, the commission noted that the parent company was responsible for this extension. Meanwhile, The Star Gold Coast received a contrasting decision, having its license suspension extended until 2027 following recommendations from Weeks.
