Federal Court orders Star Entertainment to pay AU$260 million over AML/CTF breaches

Australia's Federal Court has ordered The Star Entertainment Group to pay a penalty of AU$260 million (about $182 million) for breaching anti-money laundering and counter-terrorism financing rules. The judgment, written by Justice Moore, comes after long civil proceedings and investigations by state and Commonwealth authorities into the casino operator's activities in Queensland and New South Wales.

The court concluded that The Star had not kept a compliant AML/CTF programme and had not monitored customers properly to identify and manage money laundering and terrorism financing risks. Specific shortcomings included weak checks on customer identity and source of funds, insufficient due diligence and ongoing monitoring, and acceptance of cash deposits and other transactions from third parties without recording who they were. Customers also kept access to private gaming rooms even after suspicious activity had been observed. According to the court, these failings made it harder for AUSTRAC and law enforcement to trace illicit funds.

The judgment also noted that more than 1,200 customers were able to gamble through high-risk channels without adequate safeguards. Revenue tied to junket operations exceeded $1.4 billion, and pre-Covid junket profits were above $100 million. The Star's own estimate put revenue from high-risk customers between November 2016 and November 2022 at roughly $1.33 billion. Justice Moore said these figures show the potential to profit from a non-compliant approach, but she stressed that they do not directly measure benefits from illegal conduct.

AUSTRAC chief executive Brendan Thomas described the breaches as systemic and severe, and said the penalty reflects their seriousness and adds to earlier state and Commonwealth fines. He accused the company of operating a "private casino within its casino" with too little oversight, and said it put profit over compliance. "We will not tolerate companies putting profit over their obligations to the Australian community," he said.

AUSTRAC had indicated that penalties of up to $400 million were possible after the proceedings. Justice Moore said the AU$260 million figure took into account the $200 million in penalties The Star had already paid, along with licence suspensions and an externally appointed manager. In the civil case brought by AUSTRAC in 2022, two former senior executives were also found to have breached the Corporations Act 2001.

Last month, the New South Wales Independent Casino Commission extended The Star Sydney's licence until summer 2027, with Nicholas Weeks remaining as external manager. The Star Gold Coast had its licence suspension deadline pushed back to 2027 following advice from Weeks.