Federal Court Orders The Star to Pay $260 Million for AML Breaches

The Federal Court of Australia on October 28, 2026 ordered The Star Entertainment Group to pay a $260 million penalty for historical breaches of Australia’s anti-money laundering and counter-terrorism financing (AML/CTF) laws. The Star accepted the penalty, which is payable in four instalments over 19 months.

AUSTRAC, the Australian Transaction Reports and Analysis Centre, said the order followed findings that the casino operator breached Australia’s AML/CTF laws. In an announcement to the ASX on October 29, 2026, The Star said the judgment was handed down in proceedings brought against its subsidiaries The Star Pty Limited and The Star Entertainment Qld Limited for historical contraventions of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006.

Court Findings and Penalty Reasoning

The court found The Star failed to maintain a compliant AML/CTF program and failed to monitor customers to identify, mitigate and manage money laundering and terrorism financing risks, AUSTRAC said. The contraventions included failures to verify customer information and sources of funds, to conduct appropriate due diligence and to monitor customer activity. More than 1,200 high-risk customers were able to gamble through high-risk channels.

The gambling channels The Star operated carried elevated money laundering risks, including limited transparency over the source of funds and the facilitation of third-party transactions and cash deposits in circumstances where the third party’s identity was not recorded. The court found the non-compliance hindered the ability of AUSTRAC and law enforcement agencies to trace money to its origin, resulting in lost opportunities to disrupt unlawful activity and recover the proceeds of crime.

In determining the penalty, Justice Moore said The Star had already received $200 million in penalties for conduct that significantly overlaps with the conduct in these proceedings, that its casino licences had been suspended and that it had been under the supervision of a manager. Justice Moore said a significant part of The Star’s business was dependent on overlooking customers who presented a high money laundering and terrorism financing risk, and said there was a strong financial incentive for the conduct because casinos can benefit when inflows of money, including cash from domestic and overseas sources, face little scrutiny.

Justice Moore said revenue from junkets alone exceeded $1.4 billion, and profit from junkets in the pre-COVID years exceeded $100 million. Revenue from high-risk customers between November 2016 and November 2022 was approximately $1.33 billion on The Star’s own calculation, he said. The court said the figures were not a measure of the benefit derived from the contraventions but illustrated the potential to earn profits from a non-compliant approach to AML/CTF obligations.

AUSTRAC said the penalty follows other significant penalties and regulatory action imposed on The Star after Queensland and New South Wales casino inquiries into related regulatory failings. AUSTRAC chief executive Brendan Thomas said that in light of the penalties The Star was subjected to under those previous inquiries, the penalty reflects the seriousness of the contraventions and builds on previous state and Commonwealth fines to provide ongoing deterrence value.

“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 said.

Thomas said The Star permitted a private casino within its casino to operate without appropriate oversight, continued courting customers who had been excluded from gambling in another state, and allowed junkets to engage in highly suspicious incidents without intervening controls. AUSTRAC recognized the work of its law enforcement and regulatory partners, including the NSW Independent Casino Commission.

Bally’s Commentary on the Decision

Bally’s Corporation, an investor in The Star, said the proceedings relate to historical conduct that occurred before its investment and before the appointment of The Star’s current board and executive leadership. The company said it supports The Star’s acceptance of the Federal Court’s decision and recognizes the seriousness of the historical conduct underlying the proceedings.

In its release, datelined Providence, Rhode Island, on October 28, 2026, Bally’s said that since becoming involved with The Star it has provided strategic support to The Star’s management team under an Umbrella Consultancy Agreement, bringing expertise in casino operations, regulatory compliance and operational transformation. Soo Kim is executive chairman of Bally’s and chairman of The Star Entertainment Group.

“Fortunately for us, the turnaround is progressing at a good pace. The circumstances at The Star today are materially different from when we first became involved,” Kim said. He said Bally’s does not believe the decision renders The Star insolvent.

According to Bally’s, The Star reported Group EBITDA of A$12 million for the first quarter of fiscal 2027, a A$25 million improvement from negative A$13 million in the prior-year period. Combined revenue from The Star Sydney and The Star Gold Coast increased 9% compared with the fourth quarter of fiscal 2026, which Bally’s said was the first such growth since The Star’s quarterly reporting obligations commenced in September 2024.

Bally’s also said that in June 2026 the NSW Independent Casino Commission recognized progress occurring under The Star’s new leadership. According to Bally’s, Chief Commissioner Philip Crawford said the regulator had seen considerable progress at The Star under its new leadership and concluded that remediation progress had improved to a materially significant degree, citing The Star’s revised remediation workstreams, Bally’s expertise and technological improvements.

The Star’s Financial Position

The Star said its 2026 financial statements included a provision within Provisions, Contingent Liabilities and Regulatory Matters representing the directors’ best estimate of the outcome of the AUSTRAC proceedings, and that the penalty is materially in line with that provision. The company said it does not consider that payment of the penalty under the Federal Court’s instalment schedule will impact the group’s ability to continue as a going concern.

Kim, in The Star’s announcement, said the current ownership and management team had nothing to do with the actions that gave rise to the proceedings and commended the work of AUSTRAC and the Federal Court. He noted that at the company’s annual general meeting on October 27, 2026 he had described gaming as a public-private partnership in which The Star operates by privilege rather than by right.

The Star said the penalty’s quantum and payment terms constitute a review event under its credit facility agreement with WhiteHawk Capital Partners, which was announced to the ASX on May 7, 2026. The company said it is currently engaging with WhiteHawk and is confident the facility will remain available.