Star Entertainment Settles Tax Dispute Over Former Junket Payments

Australia’s Star Entertainment Group has reached a settlement with the Australian Taxation Office over historical tax treatment for payments made to junket tour operators, bringing an end to a lengthy Federal Court dispute.

In an announcement to the Australian Securities Exchange, the casino operator confirmed it had agreed with the Commissioner of Taxation to resolve disagreements involving the goods and services tax treatment of rebates paid to junket operators and the calculation of withholding tax on those payments.

“The Star Entertainment Group Limited announces that it has settled disputes with the Commissioner of Taxation in relation to the GST and withholding tax treatment of payments made by the Group to junket tour operators,” the company said.

The case covered GST treatment of rebates paid between October 2013 and August 2017, plus withholding tax calculations on payments made from July 2014 to June 2020.

Agreement Lowers Financial Cost of the Tax Dispute

The settlement will allow Star Entertainment to recover part of the disputed amount already paid to the tax authority.

“The Star had previously paid the Commissioner approximately AUD88 million ($61 million) of the disputed amount. As part of the settlement, the Commissioner will refund The Star approximately AUD33 million ($22.9 million),” the ASX filing stated.

The company also confirmed it will recognise the remaining balance in its financial results.

“The Star will take a charge of approximately AUD55 million ($38.2 million) for the year ending 30 June 2026,” it said.

The agreement concludes litigation over tax assessments that had exposed the company to claims exceeding AUD160 million ($111 million).

Historical Junket Business Remained at the Centre of the Case

The dispute stemmed from the ATO’s position that Star had underpaid GST on rebates and commissions paid to junket operators while also disputing the company’s approach to withholding tax calculations.

The tax authority issued amended assessments in 2021 before rejecting Star’s objections two years later, prompting the operator to challenge the decisions in the Federal Court.

“The Star ceased dealings with junket tour operators in October 2020,” the ASX announcement said.

Tax Resolution Supports Corporate Recovery Efforts

The settlement removes another outstanding issue connected to Star’s former VIP gaming business, which has faced regulatory scrutiny in recent years. It also comes as the company rebuilds after cases related to anti-money laundering failures and compliance breaches.

Earlier this year, Star secured an AUD550 million ($381.5 million) refinancing facility from funds associated with WhiteHawk Capital Partners to refinance existing debt and strengthen liquidity, pending regulatory approvals and other conditions.