Federal Court Orders The Star to Pay A$260m in AUSTRAC Money Laundering Case

Australia's Federal Court has ordered two Star Entertainment Group companies to pay A$260 million, about $182 million, for anti-money laundering failures, well short of what AUSTRAC wanted but far above what Star said it could bear. The first instalment falls due within 28 days, and the group held A$239 million in cash at the end of September.

• Justice Cameron Moore ordered The Star Pty Limited to pay A$195 million and The Star Entertainment QLD Limited A$65 million, a combined A$260 million, about $182 million, according to AAP and ABC News
• AUSTRAC had sought A$400 million, The Star had argued that anything above A$100 million would push it into liquidation, and the judge rejected both figures
• The penalty is payable in four equal instalments over 19 months, the first within 28 days of judgment, and The Star must also pay AUSTRAC's legal costs
• The judge found that Star "put profit ahead of compliance", but reduced the penalty for remediation, the group's finances and state sanctions for overlapping conduct
• The ruling came a day after The Star returned to a quarterly EBITDA profit, and the same judge is due to hear AUSTRAC's case against Entain Australia from 30 November

The Court Splits A$260 Million Between Star's Sydney and Queensland Companies

Justice Cameron Moore of the Federal Court of Australia on Wednesday ordered two subsidiaries of The Star Entertainment Group (ASX: SGR) to pay civil penalties totalling A$260 million, about $182 million, in the case the Australian Transaction Reports and Analysis Centre (AUSTRAC) filed in November 2022, according to Australian Associated Press (AAP) and ABC News. The figure is combined across the two respondents. The Star Pty Limited, the Sydney entity, must pay A$195 million, about $137 million, for conduct in Sydney, and The Star Entertainment QLD Limited must pay A$65 million, about $46 million, for conduct in Queensland. There is no further penalty on top.

AUSTRAC alleged serious and systemic breaches of Australia's anti-money laundering and counter-terrorism financing (AML/CTF) laws, including dealings with the Suncity junket and its funder, ABC News reports. The court heard that one man with known criminal links was allowed to move hundreds of millions of dollars through the casinos, according to AAP. The judge described the number of contraventions as incalculable, Proactive reports.

The penalty is payable in four equal instalments over 19 months, with the first due within 28 days of judgment, AAP reports. Capital Brief reports that the Sydney entity's last instalment falls due on 25 May 2028 and that both companies must also pay AUSTRAC's costs, the amount of which was not disclosed.

The Judge Rejected Both Sides' Numbers

AUSTRAC sought A$400 million, about $280 million, at a penalty hearing in June 2025. The Star argued that a penalty above A$100 million, about $70 million, payable within 12 months, could threaten its survival and send it into liquidation. Justice Moore found Star's figure too low and AUSTRAC's too high, ABC News reports. "In effect, Star put profit ahead of compliance and did so on a large scale," he said, according to AAP, and he called the contraventions "serious", warranting "a significant penalty".

Three things pulled the figure down, according to ABC News and The Straight: The Star's remediation, its financial position, and state sanctions already imposed for significantly overlapping conduct, including penalties and the suspension of the Sydney licence. "It is not a case of business as usual for Star," the judge said, according to AAP. He also said comparisons with Crown, which was penalised A$450 million in 2023 for similar breaches, were not useful because the cases differ significantly.

AUSTRAC Chief Executive Brendan Thomas said the regulator "will not tolerate companies putting profit over their obligations to the Australian community", according to AAP.

The Star Has Not Yet Said How It Will Pay

The Star's shares were placed in a trading halt on Wednesday morning, before the decision, for up to two days while management assesses the impact, AAP reports. They last traded at 13 cents, giving a market value of about A$763 million. The company has not publicly said how it will fund the penalty or whether it will appeal. ABC News reports that the judge said Star's profitability means it will likely need to raise money to pay.

The group's FY26 results release of 31 August listed "the quantum and timing of the AUSTRAC penalty" first among the material uncertainties that cast significant doubt on its ability to continue as a going concern. Its September quarter report said those matters will be reassessed at the half-year accounts. The Star held cash and cash equivalents of A$239 million at 30 September, and in June the NSW Independent Casino Commission (NICC) fined The Star Sydney A$10 million, payable by 30 June 2027.

The Payment Schedule Matters More Than the Headline Figure

Four equal instalments of the combined penalty work out at A$65 million each, so the first payment alone equals about 27% of the cash The Star held at the end of September. That cash already has to cover operating losses, a $390 million WhiteHawk Capital term loan and the NICC fines. The judge's reported view that Star will need to raise money suggests the court accepted it could not simply absorb the penalty, hence the 19-month schedule. Bally's Corporation and Investment Holdings put A$300 million into the group in 2025, and they would be the most likely source of any new money. The uncertainty is no longer how large the penalty will be, but who will fund it.

Discounts for Remediation Will Be Tested Again in the Entain Case

Justice Moore is due to hear AUSTRAC's case against Entain Australia, the operator of Ladbrokes and Neds, from 30 November, according to The Straight, which reports that Entain held a A$100 million provision at 30 June and has been in mediation with AUSTRAC since July 2025. Star's penalty is 2.6 times that provision, even after discounts. Entain has conceded serious historical AML/CTF deficiencies and cites a tenfold increase in its AML/CTF staff, so remediation will again be argued in mitigation. The Star judgment shows the court will reward remediation and weigh a respondent's finances, but will not take the respondent's own figure as the ceiling.

Financial Weakness Lowers a Penalty but Does Not Cap It

AUSTRAC's casino penalties now span SkyCity Adelaide's A$67 million, a figure agreed with the regulator and ordered by the court in June 2024, Star's A$260 million and Crown's A$450 million. Star's capacity-to-pay argument won a large reduction, but the court still set a penalty 2.6 times what the company said it could absorb. That is a signal for the wagering operators under AUSTRAC scrutiny, including Tabcorp, which disclosed an AUSTRAC enforcement investigation in May, according to The Straight.

The Star avoided the penalty AUSTRAC asked for, but its first payment is due within a month and its September cash balance was smaller than the full bill. The court has settled how much the group owes; it now has to show where the money will come from.