The Federal Court of Australia has ordered Star Entertainment to pay A$260 million for breaches of anti-money laundering and counter-terrorism financing rules. Justice Cameron Moore handed down the penalty on Wednesday, attributing A$195 million to conduct in Sydney and A$65 million to Queensland, payable in four instalments over 19 months.
AUSTRAC opened the civil case in November 2022 against subsidiaries The Star Pty Limited and The Star Entertainment Qld Limited. The regulator pushed for A$400 million; Star argued that anything above A$100 million could tip it into liquidation. The court found the company's figure too low and the regulator's too high. In setting the amount it weighed A$200 million in penalties Star had already paid for conduct overlapping heavily with the case, the suspension of its casino licences and the presence of an external manager. Justice Moore said the fine would have been higher without the remediation now under way.
The court held that Star's AML/CTF program was not compliant and that its monitoring of customers fell short. More than 1,200 customers gambled through channels carrying elevated money laundering and terrorism financing risk, with weak checks on source of funds and third-party cash deposits. Junket revenue alone exceeded A$1.4 billion, and on Star's own numbers high-risk customers generated about A$1.33 billion over the six years to November 2022. Brendan Thomas, AUSTRAC's chief executive, said the company let high-risk customers gamble without properly establishing where their money came from and 'put profit over compliance on a large scale'.
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Chairman Soo Kim, who also chairs majority owner Bally's Corporation, said the current board and management had no part in the conduct behind the case. Trading in Star's shares was halted on Wednesday. The company said the penalty is materially in line with the provision already booked in its 2026 financial statements and will not affect its ability to continue as a going concern, and that it is in talks with lender WhiteHawk Capital Partners and is confident the facility will remain available. On Thursday Star issued 105,917,185 new shares at A$0.1123 each to Bally's Star Holdings and Investment Holdings Pty Ltd, settling interest owed on convertible notes and subordinated debt as approved at Tuesday's annual meeting. Earlier in the week the group reported a return to positive EBITDA in the September quarter while NICC kept its Sydney licence suspended.
