Star’s A$260 Million Penalty: Why the Court’s Revenue Figures Are a Different Measure

The Star Entertainment Group has been ordered to pay A$260 million for breaches of Australia’s anti-money laundering and counter-terrorism financing laws. The Federal Court’s October 28 order is a penalty; the much larger revenue figures discussed alongside it measure something else.

A new order after earlier regulatory action

In its October 28 announcement, AUSTRAC says the court found Star failed to maintain a compliant AML/CTF program and failed to monitor customers adequately to identify and manage money-laundering and terrorism-financing risks.

The announcement also records the judge’s consideration of A$200 million in earlier penalties for substantially overlapping conduct. It refers to casino-licence suspensions and management supervision arising from previous inquiries. Those earlier actions are part of the court’s context, rather than another component hidden inside today’s A$260 million order.

Adding selected sanctions can produce a cumulative number, but it does not explain which authority imposed each one, when payment falls due or how much has already been paid. AUSTRAC’s release should not be read as a cash-flow statement for the group.

The revenue totals do not price the breaches

The court discussed more than A$1.4 billion in junket revenue and pre-COVID junket profit exceeding A$100 million. It also cited approximately A$1.33 billion in revenue from high-risk customers over November 2016 to November 2022, based on Star’s calculation.

AUSTRAC expressly says these figures are not a measure of the benefit derived from the contraventions. The court used them to illustrate the potential financial incentive for a non-compliant approach. They are therefore unsuitable as a shortcut for calculating how much money was laundered, or how much of the company’s profit the penalty removes.

The junket and high-risk-customer totals also describe different populations and periods. The release does not establish that they are mutually exclusive. Combining them into one revenue total would assume away possible overlap.

This is the same discipline needed when reading casino revenue alongside sports-betting results: identify the measure before comparing the numbers. Here the additional distinction is between commercial activity, regulatory findings and the court’s sanction.

What the control failures involved

AUSTRAC describes failures to verify customer information and source of funds, perform appropriate due diligence and monitor activity. It says more than 1,200 customers were able to gamble through channels presenting high money-laundering and terrorism-financing risks.

That is a finding about exposure and controls, not proof that every customer in the group laundered money. AUSTRAC says deficiencies in monitoring mean the amount high-risk customers put through the casinos cannot be established.

For the industry, the consequence reaches beyond the headline fine. Customer checks have to establish where money comes from and keep monitoring activity after entry. A recorded transaction volume cannot substitute for that evidence, and a court penalty cannot reconstruct the missing records.