Australia’s Federal Court has ordered The Star Entertainment Group to pay A$260 million after finding widespread and systemic breaches of anti-money-laundering and counter-terrorism-financing laws at its Sydney and Queensland operations. Justice Cameron Moore delivered the judgment on Oct. 28 in a case concerning contraventions from November 2016 to November 2022.
The penalty comprises A$195 million for conduct in Sydney and A$65 million in Queensland. As reported on Oct. 26, AUSTRAC had sought a A$400 million penalty while Star warned that a substantially lower fine could threaten the viability of its operations.
The court gave Star 19 months to make the payment in four equal instalments. The Sydney payments are due to end on May 25, 2028, and both Star Sydney and Star Queensland must also pay AUSTRAC’s legal costs.
Justice Moore considered deterrence, Star’s financial position, previous penalties and the company’s remediation work in setting the amount. AUSTRAC said Star had already received A$200 million in penalties for conduct that significantly overlapped with the matters before the court.
The regulator said the company failed to maintain a compliant AML/CTF programme and did not adequately monitor customers for money-laundering and terrorism-financing risks. Justice Moore found that Star had allowed high-risk customers to gamble without properly establishing the source of their funds and that, “In effect, Star put profit over compliance.”
The judgment found a significant part of Star’s business depended on turning a blind eye to customers presenting high money-laundering or terrorism-financing risks. The failures undermined the ability of AUSTRAC and law-enforcement agencies to trace money, disrupt unlawful activity and recover criminal proceeds.
Star Sydney committed 1,190 customer-due-diligence contraventions, having failed to monitor 102 high-risk customers and 1,088 other customers. Star Queensland committed 327 such contraventions, involving 77 high-risk customers and 250 other customers.
AUSTRAC said the company also allowed a private casino to operate without appropriate oversight, continued courting customers excluded from gambling elsewhere, and permitted junkets to use private gaming rooms despite known risks and suspicious incidents. Star’s own calculation put revenue from high-risk customers at about A$1.33 billion over the relevant period; pre-pandemic junket revenue exceeded A$1.4 billion.
AUSTRAC began civil penalty proceedings against Star Sydney and Star Queensland on Nov. 30, 2022, following a compliance campaign that began in September 2019. Its investigation of Star Sydney opened in June 2021 and expanded to Queensland and other Star entities in January 2022.
