Federal Court orders The Star to pay $260 million for AML breaches on 28 Oct 2026

The Federal Court of Australia ordered on 28 October 2026 that The Star Entertainment Group pay a fine of $260 million for historical breaches of Australia’s anti-money laundering and counter‑terrorism financing laws. The Star accepted the penalty and said the amount will be paid in four instalments over 19 months. AUSTRAC, the Australian Transaction Reports and Analysis Centre, said the court order follows findings that the casino operator contravened the Anti‑Money Laundering and Counter‑Terrorism Financing Act 2006.

Judicial findings and description of the contraventions

The court found that The Star did not maintain a compliant AML/CTF program and failed to adequately monitor its 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;

• omissions in performing appropriate due diligence;

• deficiencies in monitoring customer activity.

More than 1,200 customers assessed as high risk were able to gamble through high‑risk channels. Those channels operated with limited transparency about sources of funds, facilitated third‑party transactions and permitted cash deposits where the third party’s identity was not recorded. The court concluded that the compliance failures hindered AUSTRAC and law‑enforcement agencies from tracing the origin of funds, creating missed opportunities to disrupt illicit activity and recover proceeds of crime.

Considerations on the size of the penalty

In setting the penalty, Judge Moore noted that The Star had already received $200 million in sanctions for conduct that substantially overlapped with the matters before the court, that its casino licences had been suspended, and that the company had been placed under external management. The judge said a significant part of The Star’s business depended on turning a blind eye to customers who presented a high risk of money‑laundering and terrorism financing, and that there was a strong financial incentive for such conduct.

The magistrate provided specific figures to illustrate the magnitude of flows associated with risky activities: revenues from junkets exceeded $1.4 billion, and profit from junkets in the years prior to COVID exceeded $100 million. According to The Star’s own calculation, revenue from high‑risk customers between November 2016 and November 2022 was approximately A$1.33 billion. The court clarified that those amounts do not constitute a measure of profit derived from the contraventions, but rather show the potential to obtain gains through a non‑compliant approach to AML/CTF obligations.

Institutional reactions and regulatory context

AUSTRAC said the penalty adds to other significant sanctions and regulatory measures imposed on The Star following state‑level investigations in Queensland and New South Wales into regulatory failures. Brendan Thomas, AUSTRAC’s Chief Executive Officer, said:

"The Court found that 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 ahead of compliance at scale."

Thomas added that The Star allowed a private casino to operate within its complex without appropriate oversight, continued relationships with excluded customers in another jurisdiction, and allowed junkets to participate in highly suspicious incidents without intervention controls.

Comment from Bally’s and The Star’s financial position

Bally’s Corporation, an investor in The Star, said the proceedings relate to historical conduct that pre‑dates its investment and the appointment of the current The Star board and executive team. In a statement dated 28 October 2026 from Providence, Rhode Island, Bally’s said it supports The Star’s acceptance of the Federal Court’s decision and acknowledges the seriousness of the historical conduct identified.

Soo Kim, President and Chief Executive Officer of Bally’s and Chairman of The Star Entertainment Group, said:

"Fortunately for us, the recovery is progressing well. The circumstances at The Star today are materially different from when we first became involved."

Bally’s said it does not consider the decision renders The Star insolvent. According to Bally’s, The Star reported group EBITDA of A$12 million for the first quarter of FY2027, an improvement of A$25 million from a loss of A$13 million in the same period the prior year. Combined revenues for The Star Sydney and The Star Gold Coast rose 9% versus Q4 FY2026; Bally’s noted this was the first growth since The Star began quarterly reporting obligations in September 2024.

Bally’s added that in June 2026 the NSW Independent Casino Commission recognised remediation progress under The Star’s new management. Commissioner‑in‑Charge Philip Crawford concluded that remediation progress had improved "to a materially significant degree", citing The Star’s revised remediation workflows, Bally’s expertise and technological improvements.

Accounting impact and covenant conditions

The Star said its 2026 financial statements included a provision within Provisions, Contingent Liabilities and Regulatory Matters representing the best estimate by management of the outcome of AUSTRAC’s actions, and that the fine is materially aligned with that provision. The company said it does not consider payment of the fine under the court‑approved instalment schedule will affect the group’s ability to continue as a going concern.

The company specified that the amount and payment terms of the fine constitute a review event under its credit facility agreement with WhiteHawk Capital Partners, announced to the ASX on 7 May 2026. The Star said it is in discussions with WhiteHawk and is confident the facility will remain available.

AUSTRAC and the NSW Independent Casino Commission are among the authorities cited in the decision and in the market communication.