The Star Entertainment Group has accepted the A$260 million civil penalty imposed in AUSTRAC’s anti-money laundering case, while warning that the size and payment terms of the fine trigger a review event under its WhiteHawk credit facility.
In an ASX announcement on Thursday, the Sydney, Brisbane and Gold Coast casino operator said it is in talks with lender WhiteHawk Capital Partners and is confident the facility will remain available. The company also said the penalty is materially in line with the provision already booked in its 2026 financial statements and will not affect its ability to continue as a going concern.
Court lands between the two positions
Justice Cameron Moore of the Federal Court handed down the penalty on Wednesday, ending civil proceedings that AUSTRAC launched in November 2022 against subsidiaries The Star Pty Limited and The Star Entertainment Qld Limited. AUSTRAC had pushed for A$400 million, while Star argued that anything above A$100 million could tip it into liquidation. According to ABC News, the judge found Star’s figure too low and the regulator’s too high, ordering A$195 million to be attributed to conduct in Sydney and A$65 million to Queensland, payable in four instalments over 19 months.
In setting the amount, the court took into account that Star had already paid A$200 million in penalties for conduct that overlaps heavily with the AUSTRAC case, had its casino licences suspended and has been operating under an external manager. Justice Moore also said the fine would have been higher without the remediation work now under way.
What the court found
The court held that Star’s AML/CTF program was not compliant and that its monitoring of customers fell short. AUSTRAC said more than 1,200 customers were able to gamble through channels carrying elevated money laundering and terrorism financing risk, with weak checks on source of funds and third-party cash deposits. Junket revenue alone exceeded A$1.4 billion, while on Star’s own numbers, high-risk customers generated roughly A$1.33 billion in revenue over the six years to November 2022.
“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,” AUSTRAC chief executive Brendan Thomas said.
New owners distance themselves from the past
Chairman Soo Kim, who also chairs majority owner Bally’s Corporation, stressed that the current board and management had no part in the conduct behind the case. “We commend the work of AUSTRAC and the Federal Court,” he said, adding that The Star wants to show it now has “the right leadership, internal culture, and operational processes” to stamp out the behaviour the penalty targets.
Star’s shares were placed in a trading halt on Wednesday ahead of the judgment. On Thursday the company also issued 105,917,185 new shares at A$0.1123 each to Bally’s Star Holdings and Investment Holdings Pty Ltd, settling interest owed on convertible notes and subordinated debt as approved at Tuesday’s annual meeting.
The ruling follows a run of operational updates from the group. Earlier this week agbrief reported that Star returned to positive EBITDA in the September quarter while the NICC kept its Sydney licence suspended.
