Star Accepts A$260M Penalty Over AML Failures

Star Entertainment Group has accepted a A$260 million Federal Court penalty over anti-money laundering and counter-terrorism financing failures at its Sydney and Queensland casino businesses.

The ruling concludes civil proceedings launched by AUSTRAC in November 2022 against The Star Pty Limited and The Star Entertainment Qld Limited. The conduct examined by the court covered the period from November 2016 to November 2022.

Justice Cameron Moore ordered Star Sydney to pay A195 million and Star Queensland A65 million. The penalties will be paid in four instalments between November 2026 and May 2028, with both subsidiaries also required to cover AUSTRAC’s legal costs.

AUSTRAC had sought A400 million, while Star argued that a penalty above A100 million could place severe pressure on its financial position.

Star said the final amount is materially in line with the provision already included in its 2026 accounts and is not expected to affect its ability to continue as a going concern.

Court Finds Serious Compliance Failures

The Federal Court identified widespread deficiencies in Star’s AML and counter-terrorism financing controls, including weaknesses in customer monitoring and due diligence involving high-risk patrons.

At Star Sydney, the court identified 1,190 customer-monitoring contraventions involving 102 high-risk customers and another 1,088 patrons. Star Queensland recorded 327 contraventions involving 77 high-risk customers and 250 others.

AUSTRAC also raised concerns about Star’s junket business and the controls applied to suspicious activity. Revenue associated with junkets exceeded A1.4 billion, while profits from that business surpassed A100 million in the pre-COVID period.

According to Star’s own figures, high-risk customers generated about A$1.33 billion in revenue during the six years to November 2022.

“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,” AUSTRAC chief executive Brendan Thomas said.

“AUSTRAC will not tolerate companies putting profit over their obligations to the Australian community.”

The court also considered penalties and regulatory action Star had already faced, including about A$200 million in earlier fines linked to overlapping conduct. Its casino licences have also been subject to suspension and external management.

Justice Moore indicated that Star’s remediation work reduced the size of the final penalty.

WhiteHawk Credit Facility Under Review

Star said the penalty triggers a review event under its financing arrangement with WhiteHawk Capital Partners.

The company is discussing the matter with the lender and said it remains confident that the facility will stay available.

Chairman Soo Kim stressed that the current board and management were not involved in the conduct that led to the case.

“Star looks forward to fostering a positive relationship with AUSTRAC and to demonstrating that Star today has the right leadership, internal culture, and operational processes to eliminate the kind of behaviours that the penalty is meant to dissuade,” Kim said in a press release.

Star also issued 105,917,185 new shares at A$0.1123 each to Bally’s Star Holdings and Investment Holdings Pty Ltd to settle interest owed on convertible notes and subordinated debt following approval at its annual meeting.

Quarterly Performance Shows Improvement

The ruling came as Star reported stronger operating results for the September quarter.

Group revenue increased 2% year-on-year to A284 million. StarSydney generated A162 million, up 1%, while Star Gold Coast revenue rose 12% to A$117 million.

Operator fee revenue from Star Brisbane fell 67% to A$5 million.

Operating expenses declined 12% to A202million,helpinggroupEBITDAreachA12 million, a 191% improvement.

Star still remains under significant regulatory oversight. The suspension of The Star Sydney casino licence has been extended to June 2027.