Australia’s Federal Court has imposed an AU260 million (182 million) penalty on The Star Entertainment Group for breaches of anti-money laundering and counter-terrorism financing laws.
Justice Moore’s judgment follows investigations into operations in Queensland and New South Wales. Civil proceedings began in 2022, with the latest decision adding to years of financial penalties, licence restrictions and external oversight.
Court Identifies Failures In Customer Checks And Monitoring Of Funds
Justice Moore found that Star “failed to maintain a compliant AML/CTF programme and failed to monitor customers to identify, mitigate and manage money laundering and terrorism financing risks”.
Deficiencies included customer identification, verification of funding sources, due diligence and ongoing monitoring. Transactions and third-party cash deposits were accepted without recording those parties’ identities, while suspicious activity did not prevent continued access to private gaming rooms.
These shortcomings hindered AUSTRAC and law enforcement efforts to trace illicit money and disrupt criminal activity.
High-Risk Customers Generated Substantial Revenue Without Adequate Safeguards
More than 1,200 customers were allowed to gamble through “high-risk channels” without adequate protections.
Revenue linked to junket operations exceeded $1.4 billion, with pre-Covid junket profits above $100 million. Star estimated that high-risk customers generated approximately $1.33 billion between November 2016 and November 2022.
Justice Moore said these figures “illustrate the potential to earn profits from a non-compliant approach”. However, they did not directly measure benefits obtained through illegal conduct.
AUSTRAC Says Penalty Reflects Systemic Failures And Profit Over Compliance
Australian Transaction Reports and Analysis Centre chief executive Brendan Thomas said “the penalty reflects the seriousness of the contraventions and builds on previous state and Commonwealth fines to provide ongoing deterrence value”.
He criticised inadequate clarity about money flows during gambling. “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.”
Thomas described a “private casino within its casino”, where insufficient oversight allowed excluded customers continued access and junket operations to proceed despite recognised risks. “We will not tolerate companies putting profit over their obligations to the Australian community.”
AUSTRAC characterised the breaches as systemic and severe. Its criticism extended beyond missing documentation to the continued operation of arrangements that exposed the business to money-laundering risks, including access for customers who should have been excluded.
Previous Penalties And External Management Influenced The Court’s Decision
AUSTRAC had suggested a penalty of up to 400 million. Justice Moore said the AU260 million reflected AU$200 million in earlier penalties, together with licence suspensions and an externally appointed manager.
Two former senior executives were also found to have breached the Corporations Act 2001 over failures to manage and report money-laundering and criminal-activity risks.
According to iGaming Business, regulatory arrangements at Star Sydney were extended until summer 2027, with Nicholas Weeks remaining external manager. Although the New South Wales Independent Casino Commission acknowledged progress at the property, it attributed the extension to the parent company.
At Star Gold Coast, the licence suspension deadline was pushed into 2027 following advice from Weeks.
The judgment demonstrates that financial penalties cannot substitute for effective customer scrutiny and oversight of high-risk business relationships. Star’s revenue figures illustrate commercial exposure, but should not be presented as a calculation of unlawful profits. Lasting remediation requires evidence identifying checks and funding verification.
Share
8 views
