AUSTRAC investigation

Australia's financial crime regulator expands The Star's money laundering probe to assets outside Sydney

The Star Sydney, Australia.
2022-01-14
Australia
Reading time 1:51 min

Australia’s financial crime regulator is expanding its Star Entertainment Group money laundering probe, the company announced in a statement to the ASX on Friday. The Australian Transaction Reports and Analysis Central (AUSTRAC) has decided to now expand the scope of its investigation to other entities within The Star group, besides the initial probe at Sydney's casino. The group currently operates casinos in Sydney, Brisbane and the Gold Coast. 

The gaming company first informed the public that it was under regulatory scrutiny in June last year, when it announced it was notified by the AUSTRAC of an investigation into possible breaches of anti-money laundering and counter-terrorism laws at its casino in Sydney. 

The Star has now announced that the AUSTRAC advised the company that it has “not made a decision” regarding the appropriate regulatory response that it may apply to the gaming group, including whether or not enforcement action will be taken. Star Entertainment shares were down 0.8% in early trading following the new report.



The Star Gold Coast.
 

Moreover, the regulator advised The Star that it will “request information and documents” from the company as part of the ongoing investigation. “The Star takes its anti-money laundering obligations very seriously and will fully cooperate with AUSTRAC in relation to its requests for information and documents and the investigation,” the group said in a statement.

The New South Wales gambling regulator, the Independent Liquor & Gaming Authority (ILGA), is also preparing to hold public hearings in March as part of a review of the Sydney casino license following allegations of governance breaches, reports Brisbane Times.



The Star's Treasury Brisbane.
 

The news of the investigation expansion comes amid an announcement on Thursday that rival gaming giant Crown Resorts received an A$8.9 billion ($6.5 billion) offer from private equity group Blackstone, which the company is likely to acceptThe Star had previously shown interest in acquiring its rival, but withdrew a A$12 billion ($8.6 billion) merger offer last year, as Crown’s licenses for its Melbourne and Perth casinos came under threat of suspension amid a money-laundering investigation.

However, The Star still has an interest in combining both companies, especially after the investigation into Crown ended and the threat of suspension was lifted in September. “As we have said consistently since that time, The Star remains open to exploring potential value-enhancing opportunities with Crown,” a spokesman cited by Brisbane Times said on Thursday.

Blackstone is now set to complete its due diligence in the coming days. Should the firm make a binding offer at no less than A$13.10 ($9.56) per share, the bid will be unanimously accepted by Crown’s board, the company said.

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