Australia’s Star Entertainment Hit with A$260 Million Penalty for Serious AML Failures

Australia’s Federal Court has ordered casino operator The Star Entertainment Group to pay A$260 million for serious breaches of anti-money laundering and counter-terrorism financing (AML/CTF) laws, following findings that the company failed to properly manage financial-crime risks across its casino operations.

The penalty was imposed on 28 October 2026 after proceedings brought by the Australian Transaction Reports and Analysis Centre (AUSTRAC), the country’s financial intelligence unit and AML/CTF regulator. The court found that The Star failed to maintain a compliant AML/CTF programme and did not adequately identify, mitigate or manage the risks associated with high-risk customers and gambling activities between November 2016 and November 2022.

The breaches extended beyond deficiencies in documentation or isolated failures to complete customer checks. The court’s findings concerned weaknesses in customer verification, source-of-funds assessments, due diligence and ongoing transaction monitoring. These shortcomings undermined the ability of authorities to trace funds to their origins and identify potentially unlawful activity.

More than 1,200 customers were permitted to gamble through channels identified as presenting elevated money laundering and terrorism financing risks. The court also examined arrangements involving third-party cash deposits, where the identity of the person providing the funds was not recorded, and other gambling channels that limited transparency over the origin of money entering the casinos.

The case highlighted the particular risks associated with junket operations, which arrange gambling visits and related services for customers, often involving substantial sums. AUSTRAC reported that suspicious incidents involving junkets were allowed to continue without adequate intervention, despite known risks. The court also considered the operation of a private casino within the wider business without appropriate oversight, as well as the continued pursuit of customers who had been excluded from gambling in another Australian state.

The findings raised concerns about the relationship between commercial incentives and compliance obligations. Justice Cameron Moore observed that a significant part of The Star’s business had depended on disregarding customers who presented high money laundering and terrorism financing risks. The judgment emphasised that casinos can benefit financially when large inflows of cash and other funds are accepted with limited scrutiny.

The financial scale of the activities examined was substantial. Revenue from junkets exceeded A$1.4 billion, while profits from junkets before the COVID-19 pandemic exceeded A$100 million. The company also calculated that revenue from high-risk customers between November 2016 and November 2022 was approximately A$1.33 billion. The court clarified that these figures were not a measure of the benefit obtained from the legal breaches, but illustrated the commercial incentives associated with insufficiently controlled high-risk business.

The A$260 million federal penalty follows earlier regulatory action arising from casino inquiries in New South Wales and Queensland. The Star had already faced A$200 million in penalties for conduct that substantially overlapped with the federal proceedings. Its casino licences were also suspended, and its operations were placed under independent management.

In determining the latest penalty, the court considered the consequences the company had already experienced while also accounting for the seriousness of the contraventions and the need for deterrence. The new order is separate from the earlier penalties and forms part of a broader series of regulatory measures concerning the group’s compliance failures.

The case has significant implications for casinos and other businesses subject to AML/CTF obligations. It demonstrates that formal policies and customer identification procedures are insufficient if they do not operate effectively in practice. Businesses must understand who is providing funds, establish the source of wealth and funds where required, monitor customer activity and intervene when transactions or relationships present unacceptable risks.

Third-party payments and deposits are particularly important where the person supplying funds differs from the customer receiving the gambling service. Without reliable records linking the payer, customer and transaction, financial institutions and law enforcement agencies may struggle to reconstruct the movement of money. The court’s findings also underline the importance of identifying patterns of suspicious activity rather than assessing transactions in isolation.

The proceedings further highlight the responsibility of senior management to ensure that revenue considerations do not override compliance decisions. Where customer relationships continue despite serious warning signs, effective governance requires clear accountability, documented decisions and appropriate escalation procedures.

For the wider gambling sector, the judgment reinforces the expectation that operators must be able to demonstrate the effectiveness of their AML/CTF controls, particularly when dealing with high-risk customers, cash-intensive transactions and intermediaries. The consequences of failing to manage these risks can extend beyond financial penalties to licensing restrictions, independent supervision and reputational damage.

The A$260 million order represents another major enforcement action against The Star following years of regulatory scrutiny. It also serves as a reminder that AML/CTF compliance is an operational responsibility requiring effective customer due diligence, reliable transaction records, ongoing monitoring and timely intervention when risks emerge.

By fLEXI tEAM