Star Entertainment Group has reached a settlement with Australia’s Commissioner of Taxation over two long-running disputes involving the tax treatment of payments made to junket operators, ending a Federal Court case that had challenged hundreds of millions of dollars in assessments.

The casino operator confirmed the agreement in an Australian Securities Exchange filing on Tuesday, bringing an end to legal proceedings related to historical transactions connected to its former junket business.

The disputes involved the treatment of goods and services tax (GST) applied to rebates and commissions paid to junket operators, as well as the calculation method used for withholding tax obligations. The matters covered payments made during separate periods between 2013 and 2020.

Star Entertainment had previously challenged the Australian Taxation Office’s interpretation of the relevant tax rules, arguing that the regulator’s position was incorrect. The company began Federal Court proceedings in 2023 after the tax authority raised assessments linked to the historic payments.

Settlement covers GST and withholding tax claims

According to Asia Gaming Brief, the company said the settlement relates to two separate tax matters. The first concerned GST treatment for rebates and commissions paid to junket operators between October 2013 and August 2017.

The second dispute involved withholding tax calculations on junket rebate payments made between July 2014 and June 2020.

The Australian Taxation Office had claimed Star underpaid GST on rebates and commissions paid to junket operators, with the assessment reaching AU$158 million. A separate claim involving withholding tax obligations added a further AU$8.4 million to the amount under dispute.

As part of the settlement, the Commissioner of Taxation refunded AU$33 million from the AU$88 million that Star had previously paid toward the disputed amounts. Following the agreement, Star will record a AU$55 million charge for the financial year ending June 30, 2026.

The settlement resolves the outstanding tax issues connected to the former junket arrangements, which Star ended in October 2020.

Resolution comes during broader recovery efforts

The agreement represents another step for Star Entertainment as the company continues efforts to address regulatory challenges that have affected its operations in recent years.

The operator has been working to restore its position as a suitable casino operator in New South Wales and Queensland following the acquisition of a controlling stake by Bally’s Corporation and Investment Holdings Pty Ltd last year.

Star previously decided against seeking a formal determination of its casino licence status after the change of ownership. Instead, the company submitted a pathway-to-suitability proposal to the New South Wales Independent Casino Commission (NICC).

The tax settlement removes one of the remaining disputes linked to Star’s former business practices as the company focuses on rebuilding its operations and meeting regulatory expectations.

Star’s historical relationship with junket operators became a significant area of attention during wider reviews of the Australian casino sector. Junket operators traditionally arranged high-value gambling trips and provided services for premium players.

The tax disputes centred on payments made to these operators before Star ended its dealings with the sector in 2020.

The company and the tax authority entered mediation during the Federal Court proceedings before reaching the settlement agreement.

The resolution allows both parties to conclude the dispute without further court action over the contested assessments.