Regulatory update

The Star ordered to pay $260 million for AML/CTF breaches: lessons for reporting entities

The Federal Court has ordered The Star to pay $260 million for serious breaches of Australia’s anti-money laundering laws. Here’s what the Court found, and what it means for every business AUSTRAC regulates.

On 28 October 2026, the Federal Court ordered The Star Entertainment Group to pay a $260 million penalty for breaching the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth). The Court found The Star failed to maintain a compliant AML/CTF program, and failed to monitor its customers to identify, mitigate and manage money laundering and terrorism financing risks.

The penalty follows the action already taken against The Star after the New South Wales and Queensland casino inquiries. It’s a clear reminder that AUSTRAC looks past the paperwork. It wants to see controls that actually work, especially for a business’s highest-risk customers.

What the Court found

According to AUSTRAC’s media release, the contraventions included serious failures in The Star’s management of high-risk customers, including failures to:

• verify customer information and source of funds
• conduct appropriate due diligence
• monitor customer activity.

The Star’s gambling channels carried elevated money laundering risks. These included limited transparency over where funds came from, and third-party transactions and cash deposits where the third party’s identity wasn’t recorded. AUSTRAC said more than 1,200 customers were able to gamble through channels that were high-risk for money laundering and terrorism financing.

AUSTRAC also said The Star allowed a private casino within its casino to operate without appropriate oversight, kept courting customers who had been excluded from gambling in another state, and gave junkets ongoing access to its private gaming rooms despite highly suspicious activity.

The Court found these failures undermined the ability of AUSTRAC and law enforcement to trace money to its source, costing them the chance to disrupt unlawful activity and recover the proceeds of crime.

Profit over compliance

Justice Moore found that a significant part of The Star’s business depended on “turning a blind eye” to customers who presented a high money laundering and terrorism financing risk.

The Court noted that revenue from junkets alone was over $1.4 billion, and that revenue from high-risk customers between November 2016 and November 2022 was about $1.33 billion, on The Star’s own calculation. Those figures aren’t a measure of what The Star gained from the contraventions. But the Court said they show the potential to profit from a non-compliant approach to AML/CTF obligations. That’s why penalties need to be large enough to deter.

How the penalty was set

The Court took into account that The Star had already paid a significant price. It had received penalties of $200 million for conduct that significantly overlapped with the conduct in these proceedings, its casino licences had been suspended, and it had been placed under the supervision of a manager.

AUSTRAC CEO Brendan Thomas said the penalty reflects the seriousness of the contraventions, and builds on earlier state and Commonwealth fines to provide ongoing deterrence. The Star has told the market the penalty is payable in four instalments over 19 months.

For context, Crown Melbourne and Crown Perth were ordered to pay $450 million in 2023 for breaching the same laws.

Lessons for reporting entities

The Star is a casino, but the lessons apply to every business AUSTRAC regulates, from banks and lenders to remitters and digital currency exchanges.

• Your program has to work in practice. A well-drafted AML/CTF program isn’t enough. AUSTRAC and the courts look at whether your controls are applied, monitored and acted on.
• High-risk customers need more. Establish and verify source of funds and, where needed, source of wealth. Escalate when the information doesn’t add up.
• Know who’s really paying. Third-party payments and cash deposits need to be identified and recorded.
• Act on red flags. Knowing a customer or channel is high-risk and carrying on without extra controls is what turns a systems failure into a serious contravention.
• Senior management owns the risk. Commercial pressure is never a reason to accept risk outside your appetite.

The reforms to the AML/CTF Act started for existing reporting entities on 31 March 2026, unless deferred under the transitional rules. If you haven’t reviewed your program and risk assessment since then, now is a good time. Our AML/CTF team can help.

If your business is newly regulated

Since 1 July 2026, AUSTRAC has regulated certain services provided by real estate professionals, lawyers, conveyancers, accountants, trust and company service providers, dealers in precious stones and metals, and some virtual asset service providers. If your business provides these services, you need to be enrolled with AUSTRAC and have an AML/CTF program in place.

The Star case shows how AUSTRAC and the courts approach customer due diligence and ongoing monitoring. The same expectations apply to newly regulated businesses, scaled to their size and risk. It’s also why we ask our own clients for ID, as we explain in why we ask for ID.

Frequently asked questions

This article is general information only and is not legal advice. Please contact us for advice about your circumstances.

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