Federal Court orders The Star to pay $260 million for AML breaches

The Federal Court of Australia on 28 October 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 laws. The Star accepted the penalty; the court approved a schedule under which the amount is payable in four instalments over 19 months. AUSTRAC, the Australian Transaction Reports and Analysis Centre, said the order follows findings that The Star’s subsidiaries breached the Anti‑Money Laundering and Counter‑Terrorism Financing Act 2006.

Court findings and the contraventions

The judgment, handed down in proceedings against The Star Pty Limited and The Star Entertainment Qld Limited, concluded the casino operator failed to maintain a compliant AML/CTF program and did not adequately monitor customers to identify, mitigate and manage money‑laundering and terrorism‑financing risks. The court found failures to verify customer information and sources of funds, to conduct appropriate due diligence, and to monitor customer activity.

AUSTRAC said more than 1,200 high‑risk customers were able to gamble through high‑risk channels at The Star. The court noted the gambling channels The Star operated carried elevated money‑laundering risks, including limited transparency over sources of funds, facilitation of third‑party transactions and cash deposits where the third party’s identity was not recorded. That non‑compliance, the court found, hindered AUSTRAC and law enforcement agencies from tracing money to its origin, resulting in lost opportunities to disrupt unlawful activity and recover proceeds of crime.

Justice Moore set out reasons for the penalty and observed that a significant part of The Star’s business relied on overlooking customers who presented high money‑laundering and terrorism‑financing risk. He 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.

The court recorded specific revenue figures when describing the potential incentive. Justice Moore said revenue from junkets alone exceeded $1.4 billion, and profit from junkets in the pre‑COVID years exceeded $100 million. The court also recorded The Star’s calculation that revenue from high‑risk customers between November 2016 and November 2022 was approximately $1.33 billion. The judgment emphasised those figures illustrate the potential to earn profit from a non‑compliant approach, rather than quantifying the benefit derived from the contraventions.

Regulatory and previous enforcement context

AUSTRAC said the penalty builds on earlier state and Commonwealth regulatory action and follows Queensland and New South Wales casino inquiries into related failings. The court noted The Star had already received $200 million in penalties for conduct that significantly overlaps with the contraventions in the Federal Court proceedings, that The Star’s casino licences had been suspended, and that the company had been placed under the supervision of a manager.

AUSTRAC chief executive Brendan Thomas commented on the judgment:

"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 added that 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 recognised the work of its law enforcement and regulatory partners, including the NSW Independent Casino Commission.

Investor response and operational position

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

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

"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," Soo Kim said.

Bally’s said it does not believe the decision renders The Star insolvent. The company noted 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; Bally’s said that was the first such growth since The Star’s quarterly reporting obligations began in September 2024. Bally’s also noted that in June 2026 the NSW Independent Casino Commission had recognised remediation progress under The Star’s new leadership, with Chief Commissioner Philip Crawford concluding remediation progress had improved to a materially significant degree.

The Star’s financial reporting and credit facility

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 $260 million penalty is materially in line with that provision. The company said it does not consider payment of the penalty under the Federal Court’s instalment schedule will impact the group’s ability to continue as a going concern.

The Star noted 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 7 May 2026. The company said it is engaging with WhiteHawk and is confident the facility will remain available.

What the judgment records on figures

The court recorded these financial figures in its reasoning:

• $260 million: penalty ordered by the Federal Court of Australia on 28 October 2026

• Four instalments over 19 months: the agreed payment schedule

• $200 million: prior penalties received by The Star for related conduct

• More than 1,200: the number of high‑risk customers able to gamble through high‑risk channels

• $1.4 billion: revenue from junkets referenced by Justice Moore

• $100 million: profit from junkets in pre‑COVID years referenced by Justice Moore

• A$1.33 billion: The Star’s own calculation of revenue from high‑risk customers between November 2016 and November 2022

Readers can review regulatory detail and the court’s reasoning under broader regulation and news coverage of the matter.