The Federal Court of Australia has ordered The Star Entertainment Group to pay $260m for breaching the country's anti-money laundering and counter-terrorism financing (AML/CTF) laws. The penalty adds to a run of sanctions against the operator that followed casino inquiries in Queensland and New South Wales.
The court found The Star did not maintain a compliant AML/CTF programme and did not monitor customers well enough to identify, mitigate and manage money laundering and terrorism financing risk. Customer information and source of funds went unverified, due diligence was inadequate and activity went untracked. Justice Moore took into account that The Star had already paid $200m for conduct that significantly overlaps with these proceedings; its casino licences were suspended and the company has been under the supervision of a manager.
More than 1,200 high-risk customers were able to gamble through channels carrying elevated ML/TF risk. Money moved with limited transparency over its source, through third-party transactions and cash deposits where the identity of the third party was not recorded. Revenue from junkets alone came to over $1.4bn, and profit from junkets in the pre-COVID years exceeded $100m. Revenue from high-risk customers over November 2016 to November 2022 was approximately $1.33 billion on The Star's own calculation. Those sums are not a measure of the benefit derived from the contraventions, but they show the earning potential of a non-compliant approach to AML/CTF.
AUSTRAC CEO Brendan Thomas said The Star let high-risk customers gamble without properly establishing where their money came from, and put profit over compliance on a large scale. A private casino inside its casino ran without appropriate oversight, customers excluded in another state were still courted, and junkets kept access to private gaming rooms despite the known risks around them. Because of the monitoring gaps, the amount that high-risk customers moved through the casinos cannot be known. The court said the failures undermined the ability of AUSTRAC and law enforcement to trace money to its source, costing them the chance to disrupt unlawful activity and recover the proceeds of crime. Justice Moore pointed to the incentive behind it: cash from domestic and overseas sources can flow with limited friction and limited scrutiny. For operators, the case puts a price on weak controls.
