Federal Court Orders Star Entertainment to Pay A$260 Million AUSTRAC Penalty for Anti-Money Laundering Failures

The Federal Court of Australia ordered two subsidiaries of The Star Entertainment Group to pay a combined A$260 million (about US$182 million) on 28 October 2026 after finding that Star's Sydney and Queensland casinos broke anti-money laundering and counter-terrorism financing (AML/CTF) law for six years, ending the Star Entertainment AUSTRAC penalty case that began in 2022. The Star Sydney must pay A$195 million and the Queensland business A$65 million, in four equal instalments over 19 months.

The case was brought by the Australian Transaction Reports and Analysis Centre (AUSTRAC), the national financial intelligence agency and AML regulator, under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006. Justice Cameron Moore's judgment is cited as [2026] FCA 1606.

The penalty and how Star will pay it

The court fixed the amount after a contested hearing. AUSTRAC asked for A$400 million, while Star argued that a penalty much above A$100 million payable within a year could threaten its survival. Justice Moore rejected A$100 million as too low and A$400 million as excessive, according to Proactive.

The remaining three instalments fall due within the 19-month schedule, per Bally's Corporation's statement on the ruling.

What the court found

The judge found that from November 2016 to November 2022 Star did not maintain a compliant AML/CTF program and did not adequately monitor its customers. Trade reports of the judgment describe weak identity and source-of-funds checks, cash deposits accepted from third parties whose identities were not recorded, and continued access to private gaming rooms for customers whose activity had raised suspicion. iGaming Business reported that over 1,200 patrons were able to play through risky channels with insufficient controls.

Justice Moore was blunt about motive. "In effect, Star put profit ahead of compliance," he wrote, as quoted by Proactive. He also said much of Star's business relied on "turning a blind eye" to customers posing high money laundering and terrorism financing risk, according to Gaming Intelligence, and described the number of contraventions as incalculable.

The money at stake was large. Star's own calculation put revenue from high-risk customers over the six years at about A$1.33 billion, and junket-linked revenue exceeded A$1.4 billion. The judge said these figures showed the scope to profit from non-compliance but did not measure profit from the unlawful conduct itself.

AUSTRAC chief executive Brendan Thomas said the regulator "will not tolerate companies putting profit over their obligations" to the community, per Gaming Intelligence. He added that the total sum those risky patrons pushed through Star's venues cannot be known.

How it compares with other casino cases

Star's penalty is the second-largest AUSTRAC has won against a casino operator. Crown and SkyCity both settled; Star's amount was decided by the judge.

SkyCity, which was ordered to pay A$67 million over its Adelaide casino, had earlier raised its penalty provision before the hearing. AUSTRAC has since widened its focus beyond the largest groups, ordering external audits at The Ville and Mindil Beach casinos and investigating bet365's AML controls.

Star's finances and Bally's position

Star says it can absorb the ruling. In the statement released by Bally's, the company said the penalty is materially in line with the provision it booked in 2026 and that the instalment plan will not affect its ability to continue as a going concern. The ruling counts as a review event under Star's credit facility with WhiteHawk Capital Partners; Star said it expects the facility to stay available.

The margin is thin. Auditor EY flagged material uncertainty about Star's going-concern status in August, and Star reported a A$307 million loss for the 2026 financial year, down from A$428 million a year earlier. A day before the judgment it posted group EBITDA of A$12 million for the first quarter of fiscal 2027, against a loss of A$13 million a year earlier. Its shares were in a trading halt before the ruling and last traded at A$0.13.

Bally's, the US casino group, committed A$200 million of a A$300 million rescue package in 2025, and its chairman Soo Kim said then that Star's solvency was a condition of converting that debt into equity. Kim, who also chairs Star, said in the statement on the ruling that keeping a gaming license "requires accountability." Bally's stressed that the conduct predates its investment and Star's current board.

A long run of regulatory penalties

The AUSTRAC penalty adds to state sanctions over the same era. New South Wales and Queensland each fined Star A$100 million in 2022 after inquiries into its suitability, and the New South Wales Independent Casino Commission (NICC) threatened a further A$100 million fine or license cancellation in 2024. On 1 June 2026, Star disclosed A$10 million in new NICC fines plus a A$5 million technology undertaking over financial crime risk failures between 2018 and 2025. Its licenses in both states remain under suspension with external managers in place, according to iGaming Business.

What happens next

The first A$65 million is due by 25 November 2026. Investors will watch whether WhiteHawk keeps the facility open and whether Star's quarterly cash flow stays positive through the payment schedule. Neither AUSTRAC's announcement nor Bally's statement mentioned an appeal.

Status reviewed on 30 October 2026. Penalty amounts, the payment plan and court findings are from AUSTRAC's announcement, Bally's statement and trade reporting of the judgment; the judgment text itself was not reviewed. More legal news and Oceania coverage.