Star Entertainment faces $260 million fine over money laundering breaches

Australia’s Star Entertainment Group is facing a potential AU$400 million ($260 million) fine over anti-money laundering breaches linked to high-roller junket operations, in a case brought by the country’s financial crime watchdog AUSTRAC.

The penalty, proposed during a Federal Court hearing on Wednesday, stems from civil proceedings accusing the embattled casino operator of enabling billions of dollars in suspect transactions through its properties in Sydney, Brisbane, and the Gold Coast between 2016 and 2020.

AUSTRAC alleges Star facilitated money laundering by 117 high-risk patrons, including through extensive dealings with Macau-based junket operator Suncity Group, which had links to Chinese organised crime. The court heard Suncity junkets generated over AU$11.8 billion ($7.66 billion) in Sydney and AU$2.9 billion ($1.88 billion) in Queensland during the period.

Simon White SC, representing AUSTRAC, told the court the proposed AU$400 million penalty was proportionate to the company’s failings.

“If you want to run a casino, you’ve got to put in place very costly and significant systems, processes, and controls,” he said. “There was a manifest failure on the part of Star to do that, and that warrants this court imposing a very high penalty.”

White added that the penalty was designed as a deterrent but was not intended to “oppress the wrongdoer.” Star has argued that a fine exceeding AU$100 million could threaten its financial survival.

The company is seeking to pay any penalty in instalments and requested that portions of the hearing be held in closed court, citing the need to protect sensitive financial information during ongoing negotiations with lenders. Star’s chief financial officer, Frank Krile, was cross-examined behind closed doors on Wednesday.

According to court submissions, Star allegedly continued its relationship with Suncity and its former chairman, Alvin Chau, until Chau’s arrest in Macau in 2021 — more than two years after the company received a report detailing the junket’s connections to organised crime and money laundering.

Star has admitted to widespread compliance failures. The company reported a loss of over AU$300 million for the six months to December 2024, worsened by regulatory changes including cash transaction limits and mandatory identification cards.

In April, the group secured a AU$300 million lifeline from U.S. casino operator Bally’s Corporation and Australian businessman Bruce Mathieson. The deal, which may shift control of Star to Bally’s, includes a AU$100 million equity injection from the Mathieson family.

A separate case brought by the Australian Securities and Investments Commission (ASIC) against former Star executives over governance failures concluded last week.

Shares in Star Entertainment have been under pressure amid continued regulatory scrutiny and financial instability. The court has yet to rule on the penalty.