Star Entertainment Fined AU$260 Million Over Money Laundering Failures
Australia.- 29 October 2026 | www.zonadeazar.com Australia’s Federal Court has imposed a AU$260 million penalty (approximately US$183 million) on The Star Entertainment Group for serious breaches of anti-money laundering and counter-terrorism financing (AML/CTF) legislation.
The judgment, delivered on 28 October 2026, follows civil proceedings initiated in 2022 by Australia’s financial intelligence agency, AUSTRAC.
The Court found that the casino operator permitted high-risk gambling activity without adequate controls over customer identification, sources of funds and suspicious transactions.
The ruling represents one of the most significant penalties imposed on Australia’s casino industry for regulatory compliance failures.
Penalties for Sydney and Gold Coast Casinos
The financial penalty applies to two casino operations within The Star Entertainment Group.
The Federal Court established the following breakdown:
- The Star Sydney: AU$195 million.
- The Star Gold Coast: AU$65 million.
- Total penalty: AU$260 million.
Justice Cameron Moore considered the seriousness and duration of the breaches, alongside their consequences for the integrity of Australia’s financial system.
The judgment also took account of previous regulatory penalties imposed on the company and its current financial circumstances.
Compliance Failures Between 2016 and 2022
The investigation examined operations conducted between 30 November 2016 and 30 November 2022.
During this period, The Star’s casinos failed to maintain adequate anti-money laundering and counter-terrorism financing programmes.
The principal deficiencies included:
- Inadequate customer identity verification.
- Insufficient checks on sources of funds.
- Weak transaction monitoring procedures.
- Failures to conduct enhanced customer due diligence.
- Inadequate management of high-risk customers.
The Court concluded that these shortcomings undermined the authorities’ ability to identify suspicious transactions and trace potentially illicit funds.
More Than 1,200 Customers Used High-Risk Channels
According to AUSTRAC, more than 1,200 customers were able to gamble through channels presenting elevated money laundering risks without sufficient safeguards.
The regulator identified transactions involving cash deposits and third-party transfers where the identities of those providing the funds were not always recorded.
These arrangements made it difficult to establish the origins of money used for gambling.
Investigators also found that certain customers continued accessing gaming facilities despite previously identified risk concerns.
Court Criticises Focus on Commercial Profits
The judgment concluded that the problems extended beyond administrative errors and inadequate technical controls.
Justice Cameron Moore found that a significant part of The Star’s business depended on accepting customers presenting elevated money laundering risks.
AUSTRAC argued that the company had prioritised commercial profits over regulatory compliance.
The agency emphasised that allowing high-risk activities without effective supervision compromised the authorities’ ability to prevent and detect financial crime.
Statements From AUSTRAC’s Chief Executive
Brendan Thomas, Chief Executive Officer of AUSTRAC, highlighted the seriousness of the breaches.
“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 stated.
Thomas also warned that the regulator would not tolerate companies placing commercial interests ahead of their obligations to protect Australia’s financial system.
AUSTRAC believes the penalty will help deter similar conduct across the industry.
Irregularities Involving VIP Rooms and Junket Operators
The investigation identified particularly serious problems involving high-value customers.
According to AUSTRAC, The Star permitted certain junket operators, intermediaries organising visits for high-spending gamblers, to continue accessing private gaming rooms despite known risk indicators.
The regulator also criticised the operation of a private gambling facility within the casino that lacked adequate supervision.
These arrangements allegedly facilitated financial transactions without sufficient transparency regarding the origins of the funds.
AU$1.4 Billion in Junket Revenue
The court proceedings examined the revenue generated by customers and activities considered particularly high risk.
Key figures included:
- More than AU$1.4 billion: revenue generated through junket operations.
- More than AU$100 million: profits from junkets during the pre-pandemic years.
- AU$1.33 billion: revenue attributed to high-risk customers between November 2016 and November 2022.
The Court clarified that these figures do not directly measure the financial benefits derived from legal violations.
However, they illustrate the economic incentives associated with operating without effective compliance controls.
Penalty Below AUSTRAC’s Requested Amount
During the proceedings, AUSTRAC sought a penalty of AU$400 million.
The Star argued that a fine exceeding AU$100 million could seriously threaten its financial viability.
The Federal Court ultimately imposed a AU$260 million penalty.
In reaching this decision, Justice Moore considered both the seriousness of the misconduct and the sanctions already imposed on the operator.
The Star had previously faced approximately AU$200 million in state regulatory penalties for related compliance failures.
Penalty Payable in Four Instalments
The Court authorised The Star to pay the penalty in four instalments of AU$65 million, spread over approximately 19 months.
The payment schedule is:
- 25 November 2026: first instalment.
- 25 May 2027: second instalment.
- 25 November 2027: third instalment.
- 25 May 2028: fourth and final instalment.
The arrangement aims to secure payment while taking account of the company’s financial difficulties.
The casino entities must also pay AUSTRAC’s legal costs associated with the proceedings.
The Star’s Financial Position
The ruling comes at a difficult financial moment for the Australian casino operator.
At the end of September 2026, The Star reported AU$239 million in cash and cash equivalents, alongside AU$80 million in restricted deposits.
The company had previously warned that a significantly higher penalty could raise serious doubts about its ability to continue operating.
The Court considered these circumstances when determining both the penalty amount and the payment schedule.
Previous Regulatory Action in Australia
The Star Entertainment Group has already faced penalties associated with regulatory failures in New South Wales and Queensland.
Earlier investigations resulted in casino licence suspensions and the appointment of external managers to supervise certain operations.
In Sydney, the company remains subject to regulatory oversight while implementing measures designed to strengthen its compliance framework.
These developments were also considered by the Federal Court when establishing the financial penalty.
Industry Impact and Next Steps
The AU$260 million penalty represents an important development in Australia’s casino regulatory landscape.
The judgment reinforces the need for effective customer identification, source-of-funds verification and transaction monitoring procedures.
For The Star, the immediate priorities will be meeting the payment schedule and continuing efforts to stabilise its financial and regulatory position.
The ruling also sends a clear message to the wider industry: casino operators must demonstrate that their anti-money laundering programmes operate effectively, particularly when serving high-risk customers.
Edited by: @fonta
