Australian court fines The Star A$260 million for anti-money laundering breaches
Key Facts
On October 28, the Australian Federal Court ordered Star Entertainment to pay a A$260 million penalty for breaches of anti-money laundering and counter-terrorism financing laws, according to AUSTRAC. The case concerns two subsidiaries of the group, The Star and The Star Entertainment Queensland, which operate the group’s casinos in Sydney and Queensland. The penalty therefore does not apply to Bally’s, which is connected to the group as an investor and owner, as Bally’s said in a statement. The agency said the court found that The Star had failed to maintain a compliant program and had not monitored customers to identify and manage money laundering and terrorism financing risks. The ruling places customer-monitoring failures at the center of the case, alongside the scale of the penalty imposed on the casino operator.
AUSTRAC said more than 1,200 customers were able to gamble through high-risk channels linked to money laundering and terrorism financing during the period covered by the case. The judge said that "a significant part of Star’s business depended on turning a blind eye to customers who represented high risks of money laundering and terrorism financing." The company’s accounts, as cited in the ruling, estimated revenue from high-risk customers at about A$1.33 billion between November 2016 and November 2022. The court found that the failure was not limited to procedural shortcomings, but also included a failure to follow up with customers who displayed those risks. These details provide a picture of the scope of the business underpinning the ruling and the period covered by the breaches.
AUSTRAC said the penalty builds on previous government sanctions and provides ongoing deterrence, while the judge referred to previous penalties of A$200 million for conduct that substantially overlapped with the facts in the current case. The Star said on October 29 that it accepted the ruling and penalty, which will be paid in four installments over 19 months. The company said the penalty was materially in line with a provision previously recorded, and that payment under the court’s schedule would not affect its ability to continue as a going concern. Chairman Soo Kim added that the current owners and management team had no connection to the conduct that led to the case. He said the company wanted to demonstrate that it now had appropriate leadership, internal culture and operations.
The company said the size of the penalty and its payment terms constitute a review event under its credit facility agreement with WhiteHawk, and that it was in talks with the lender and confident the facility would remain available. The ruling comes as the group seeks to improve its operating results, having reported consolidated EBITDA of A$12 million in the first quarter of fiscal 2027. That marked an improvement of A$25 million compared with a loss of A$13 million in the corresponding period. The group had A$239 million in cash and cash equivalents on September 30, 2026, compared with A$267 million on June 30. The Sydney casino license remains suspended, while the appointment of the manager continues until June 30, 2027, unless the New South Wales Independent Casino Commission ends the appointment earlier.
After trading resumed on Thursday, October 29, The Star shares rose as much as 9.6% to A$0.143, according to Reuters. Bally’s had said the historical breaches at issue in the case predated its investment in the group and the appointment of the current board and executive leadership. That places Bally’s clarification on the timing of the breaches alongside The Star chairman’s confirmation that current management was not involved in the conduct at issue. The penalty is to be paid in installments over 19 months, while the Australian Bureau of Statistics has set November 25, 2026, as the release date for October’s consumer price index. The case materials did not link the ruling to that economic reading, which was included in the upcoming releases calendar.