Star penalty marks first contested AML/CTF issue

The penalties are to be paid by both casinos over four instalments between 25 November 2026 and 25 May 2028.

In a decision handed down on Wednesday, 28 October, Justice Moore said Star “put profit over compliance”.

This was particularly the case when Star welcomed and encouraged high-risk customers and excluded customers, despite senior management being on notice that they were “likely involved in organised crime and likely engaging in money laundering”.

“That conduct was egregious,” Justice Moore said.

Star Sydney and Queensland were found in breach of section 81(1) of the act, which prohibits a reporting entity from providing a designated service to a customer unless it has first adopted and maintained a compliant AML/CTF program.

The casinos accepted that their joint program was deficient.

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The exact number of contraventions under this particular section was “incalculable (but undoubtedly very large)”.

They also contravened section 36(1), which imposes an obligation that reporting entities conduct ongoing customer due diligence in relation to the provision of the entities’ designated services.

Star Sydney’s contraventions occurred on 1,190 occasions, 102 of which involved high-risk customers. For the 327 occasions it occurred in Queensland, 77 involved high-risk customers.

“Those failures were not isolated or episodic. They were not mere oversights from time to time. They were not mere failures of low-level employees unknown to senior management,” the court said.

“Rather, a very significant part of Star’s business was dependent upon services that facilitated a relatively seamless movement of money into and out of the casino business (including from overseas) in a way that gave rise to a high risk of ML/TF.”

Star’s conduct caused “significant harm” to the Australian and global community and financial systems, which have since been exposed to systemic money laundering and terrorism financing risks over the following years, Justice Moore added.

It has also served to undermine AUSTRAC and law enforcement agencies’ ability to disrupt unlawful activity.

“It is important that Star be deterred from ever putting profit over AML/CTF compliance,” Justice Moore said.

“It is important that other entities are sent the message that conduct of the sort engaged in by Star will attract a significant penalty and is not worth the risk.”

While it admitted a failure to comply with various requirements under the rules, Star disputed the amount it should pay as a consequence, making it the first time the Federal Court has had to rule on conflicting submissions on penalty.

AUSTRAC argued the casinos should pay a total of $400 million, but Justice Cameron said this figure was “too high”.

In coming to the $260 million figure, Justice Moore noted Star has been the subject of two inquiries that considered the suitability of both casinos to hold their respective casino licences. The Star received penalties of $200 million in respect of one of the inquiries, and lost its licences as a result of the second.

Star has also been under the supervision of a manager as it undertakes a process of improving its management, culture, systems and processes.

These matters reduced the penalty that would have otherwise been ordered to address specific deterrence.

It also had an impact on general deterrence.

“These reasons will make plain that, but for the State regulatory response to the conduct, including the levying of significant penalties, the licence suspension and the resulting onerous requirements and controls, the penalty for Star would have been higher. That is a relevant consideration for any person contemplating their compliance with the AML/CTF Act.”

Citation: Chief Executive Officer of the Australian Transaction Reports and Analysis Centre v The Star Pty Limited [2026] FCA 1606.