Star Entertainment fined A$260m for breaching AML rules

Australian casino operator The Star was fined over A$260m by Federal Court for anti money laundry and counter-terrorism financing breaches. On Wednesday the ruling was published, reporting that The Star Entertainment Group failed to maintain a compliant AML/CTF program, failed to monitor customers to identify and terrorism financing risks between November 2016 and November 2022. By the order of the Court, Star Sydney will pay $195 million, $48.75 million must be paid by November 25, and The Star Queensland has to pay $65 million, including $16.25 million by 25 November. The investigation was first announced by the AUSTRAC and was ongoing since November 2022. AUSTRAC CEO Brendan Thomas said: The Court found The Star did not simply fail to complete the right checks. It allowed high-risk customers to gamble without properly establishing where their money came from and put profit over compliance on a large scale. AUSTRAC will not tolerate companies putting profit over their obligations to the Australian community. It permitted a private casino within its casino to operate without appropriate oversight and continued courting customers who had been excluded from gambling in another state. The Star allowed junkets to engage in highly suspicious incidents without intervening controls and despite its concerns about these activities, and the known risks associated with junkets, it allowed ongoing access to its private gaming rooms. The court determined that the failure of The Star to comply with the AML/CTF Act “has hindered AUSTRAC and law enforcement agencies’ capacity to trace the origin of money which resulted in the loss of an opportunity to prevent illegal activities and seize the criminal proceeds”. The breaches consisted of significant shortcomings in the handling of the high-risk customers of The Star including the inability to verify the customers’ data including information about the source of funds, conduct the necessary background checks and monitor the conduct of the customers including gambling activities. The gambling activities of The Star were associated with extremely high money laundering risks which were due to the lack of transparency in terms of the source of funding as well as provision of third-party transactions and cash payments in cases where no information was available about the identity of the third party. Justice Moore said: Star continued to receive and profit from money that evidence available to it suggested was most likely from criminal activity and was being laundered. The revenue from junkets alone was over $1.4 billion… and the profit from junkets in the pre-COVID years exceeded $100 million. Likewise, the revenue from high-risk customers alone over the [November 2016 to November 2022 period] was approximately $1.33 billion on Star’s own calculation…it illustrates the potential to earn profits from a non-compliant approach to AML/CTF obligations. The Star Entartainment did not publicly commented on the Judge decision yet.