Federal Court orders Star casinos to pay A$260m over AML failures

The Federal Court of Australia has ordered Star Sydney and Star Queensland to pay combined civil penalties of A$260m after finding that both provided designated services while their joint anti-money laundering and counter-terrorism financing (AML/CTF) programme failed to comply with the law. In its 28 October 2026 judgment, the court declared that the entities contravened section 81(1) of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 between 30 November 2016 and 30 November 2022.

The penalty is divided between the two businesses. Star Sydney, The Star Pty Limited, must pay A$195m. Star Queensland, The Star Entertainment QLD Limited, must pay A$65m. Each entity must pay in four equal instalments on 25 November 2026, 25 May 2027, 25 November 2027 and 25 May 2028. The court also ordered both entities to pay AUSTRAC’s costs. Those costs are separate from the A$260m penalty.

What the court found

The judgment also records contraventions of section 36(1), concerning failures to monitor customers. The court identified 1,190 occasions involving Star Sydney and 327 involving Star Queensland.

Those findings concern historical conduct and the operation of the entities’ joint programme. They are distinct from the allegations AUSTRAC made when it commenced proceedings on 30 November 2022. At that stage, the regulator alleged serious and systemic non-compliance, including failures to assess changing money laundering risks, maintain appropriate risk-based controls and oversight, monitor transactions, and conduct enhanced and ongoing customer due diligence. The Federal Court’s declarations and penalties are the outcome of that litigation, rather than a restatement of allegations as findings.

The court assessed the appropriate total penalty at A$260m, taking account of the entities’ relative size and involvement. In setting the amount and allowing payment by instalments, the judge considered earlier penalties, licence suspensions, closer supervision, remediation and Star’s financial position. Those matters affected the penalty assessment and payment structure; they did not erase or excuse the contraventions.

The instalment order gives the group time to meet the penalty, but it also creates a near-term cash obligation. The first payment is A$48.75m for Star Sydney and A$16.25m for Star Queensland. The court’s separate costs order means the ultimate cash impact will exceed the stated penalty, although the judgment does not quantify those costs in the selected orders.

Why the decision matters

For gambling operators, the practical significance is the court’s treatment of programme-wide and customer-level failures together.

The 1,517 recorded section 36(1) contraventions also show the potential exposure where monitoring failures are repeated across customers or transactions. A control that is formally present but does not identify or respond to changing risk can become evidence of sustained non-compliance rather than an isolated lapse.

Operators facing regulatory scrutiny should preserve evidence of when weaknesses were identified, how they were escalated, what corrective action was taken and whether the revised controls were tested. The judgment treats prior regulatory action, remediation and financial position as factors in the penalty assessment and payment arrangements. The outcome therefore calls for scrutiny of both the underlying control failures and the evidence presented in mitigation.

The first A$65m combined instalment is due on 25 November 2026, followed by the three remaining instalments through 25 May 2028.