The Star Entertainment Group has been ordered to pay AU$260m by the Federal Court. The penalty follows findings that the casino operator breached Australia's anti-money laundering and counter-terrorism financing laws.
The penalty follows proceedings brought by AUSTRAC and relates to failures including inadequate oversight of high-risk customers, shortcomings in verifying customer information and sources of funds, and insufficient monitoring of suspicious activity.
The Court found more than 1,200 customers were able to gamble through channels carrying elevated money laundering and terrorism financing risks. The Star also allowed junkets and private gaming operations to continue despite known risks and deficiencies in its controls.
Revenue from junkets exceeded AU$1.4bn, while revenue associated with high-risk customers was approximately AU$1.33bn between November 2016 and November 2022. The Court noted that these figures were not a direct measure of benefits derived from the breaches but demonstrated the potential financial incentive associated with inadequate compliance.
The AU$260m fine is below the AU$400m penalty sought by AUSTRAC. The Star had previously argued that a penalty exceeding AU$100m could threaten its survival. The company will instead have 19 months to pay the fine in four equal instalments.
However, Chairman Soo Kim said The Star's financial circumstances have improved since those arguments were made and that the AU$260m penalty is not expected to render the company insolvent. Kim, who is also chairman of major shareholder Bally's Corporation, said the group's turnaround had progressed and it could meet its obligations.
The ruling comes shortly after The Star reported signs of improvement in Q1 FY27. Group revenue rose 2% year on year to AU$284m, while EBITDA reached AU$12m, compared with a AU$13m loss a year earlier. The company held AU$239m in cash and cash equivalents at 30 September.
Despite the improved performance, The Star continues to face regulatory uncertainty, with its Sydney casino licence remaining suspended and its Gold Coast operation continuing under special management arrangements.
The Star Sydney was fined AU$500,000 in August after a minor entered the casino three times using fraudulent identification
