Following lengthy civil proceedings The Federal Court has issued a landmark ruling against The Star Entertainment Group, imposing a penalty of AU$260 million ($182 million) for breaches of Australia’s anti‑money laundering and counter‑terrorism financing (AML/CTF) laws.
The judgment, delivered by Justice Moore and published on Wednesday, follows extensive investigations and regulatory actions at both state and Commonwealth levels into the casino operator’s activities in Queensland and New South Wales.
Justice serves her findings
Justice Moore found The Star responsible for significant compliance failures, stating that the company “failed to maintain a compliant AML/CTF programme and failed to monitor customers to identify, mitigate and manage money laundering and terrorism financing risks”.
According to the court, The Star’s breaches included inadequate verification of customer identity and sources of funds. It also found insufficient due diligence and ongoing monitoring of customer activities.
The Star had also allowed transactions and cash deposits from third parties without recording their identities in addition to continued access to private gaming rooms despite observation of suspicious activity.
These failings were found to hinder AUSTRAC and law enforcement’s ability to track illicit funds and disrupt criminal activity effectively.
The court also stated that over 1,200 customers were allowed to gamble via “high-risk channels” without adequate AML/CTF safeguards.
Additionally revenue was linked to junket operations exceeding $1.4 billion, with pre-Covid junket profits surpassing $100 million.
The Star’s own estimates placed revenue generated from high-risk customers between November 2016 and November 2022 at approximately $1.33 billion.
Justice Moore emphasised these figures “illustrate the potential to earn profits from a non-compliant approach” but do not directly quantify benefits derived from illegal conduct.
‘Private casino within a casino’
The Australian Transaction Reports and Analysis Centre (AUSTRAC), the federal body responsible for financial intelligence regulation, described the breaches as systemic and severe.
AUSTRAC Chief Executive Brendan Thomas commented that “the penalty reflects the seriousness of the contraventions and builds on previous state and Commonwealth fines to provide ongoing deterrence value”.
Thomas emphasised The Star’s failures to clearly define revenue flow during play.
“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 criticised The Star for operating a “private casino within its casino” with insufficient oversight, facilitating continued access to excluded customers and enabling junket operations despite known risks.
Highlighting AUSTRAC’s stance, he added: “We will not tolerate companies putting profit over their obligations to the Australian community.”
Here we go again?
Such penalties and proceedings have been ongoing for several years for both the parent company and its many children.
As part of the civil proceedings launched by AUSTRAC in 2022, two former senior executives of The Star Entertainment Group were found by Australia’s Federal Court to have breached the Corporations Act 2001, due to failures in managing and reporting money-laundering and criminal-activity risks.
AUSTRAC had suggested fines of up to $400 million were on the table for The Star following the conclusion of the civil proceedings. However, Justice Moore explained that the choice of the $260 million figure reflected the previous penalties totalling $200 million already paid by The Star, as well as licence suspensions and an externally appointed manager.
Just last month, New South Wales Independent Casino Commission (NICC), announced that The Star Sydney would have its casino licence extended until summer 2027. Nicholas Weeks would remain the external manager.
Acknowledgment was made of The Star Sydney’s steps towards progress, however the parent company was, according to NICC, to blame for such an extension.
A few hundred kilometres up the road, The Star Gold Coast was served with a contrasting verdict as it had its licence suspension deadline pushed until 2027. This followed advice from Weeks.
Kathryn Evans
Kathryn covers bitesize breaking news with a primary focus on EMEA and US legislation. A proud North Walian, fluent Welsh speaker and lifelong Wrexham FC fan – long before Hollywood came calling.