Star Entertainment ordered to pay AU$260 million for AML failings

The Federal Court has imposed a AU$260 million ($182 million) penalty on The Star Entertainment Group, closing out civil proceedings brought over breaches of Australia's anti-money laundering and counter-terrorism financing rules.

Justice Moore delivered the judgment on Wednesday, following years of state and Commonwealth scrutiny of the casino group's conduct in Queensland and New South Wales.

The court found The Star had failed to run a compliant AML/CTF programme and had not monitored customers adequately to spot, limit or manage money laundering and terrorism financing risks, according to Justice Moore's findings.

Judges identified a string of specific lapses: weak checks on customer identity and the source of funds, poor ongoing monitoring of player activity, and cash or third-party transactions processed without recording who was actually behind them.

The court also noted that customers kept access to private gaming rooms even after staff had observed behaviour that should have raised suspicion, conduct it said made it harder for AUSTRAC and law enforcement to trace illicit money and disrupt criminal networks.

More than 1,200 customers were found to have gambled through high-risk channels without adequate safeguards in place.

Junket-linked revenue exceeded $1.4 billion, with profits from that business line topping $100 million before the pandemic. The Star's own figures put revenue from high-risk customers between November 2016 and November 2022 at roughly $1.33 billion.

Justice Moore said those sums showed how a non-compliant approach could generate profit, while stressing they did not amount to a direct measure of gains from unlawful conduct.

AUSTRAC, the federal financial intelligence regulator that brought the case, described the misconduct as systemic and severe. 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".

Thomas said the court's findings went beyond missed paperwork. "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."

He accused the operator of running what he called a "private casino within its casino", giving excluded customers continued access and allowing junket operations to proceed despite known risks. "We will not tolerate companies putting profit over their obligations to the Australian community," Thomas added.

AUSTRAC had argued for a penalty of up to $400 million when it launched the civil case in 2022. Justice Moore said the lower $260 million figure accounted for AU$200 million in penalties The Star has already paid, alongside licence suspensions and the appointment of an external manager.

That same 2022 action also led the Federal Court to find two former senior Star executives in breach of the Corporations Act 2001 over failures to manage and report risks tied to money laundering and criminal activity.

Regulatory oversight of the group continues on separate tracks. The New South Wales Independent Casino Commission said last month that The Star Sydney's casino licence would be extended until summer 2027, with Nicholas Weeks remaining as external manager, while attributing blame for the extension to the parent company rather than the Sydney operation.

The Star Gold Coast received a different outcome, with its licence suspension deadline pushed back to 2027 on Weeks's advice.