Federal Court fines Star $260m for money-laundering breaches

Australia's Federal Court has fined Star Entertainment $260 million for breaches of anti-money laundering and counter-terrorism financing laws, in a judgment delivered by Justice Cameron Moore on Wednesday, 28 October 2026.

The penalty, sought by financial crime regulator Austrac, is payable in four instalments of $65 million each. The first falls due next month. The last is due in May 2028.

Justice Moore was unsparing in his assessment of the casino operator's conduct. "In effect, Star put profit over compliance and did so on a large scale," he told the court.

The figure sits between the competing submissions. Austrac had argued $400 million was appropriate. Star had contended in court last year that any fine above $100 million, payable within 12 months of the hearing, would strain its liquidity, including its access to equity markets. The company's most recent annual report acknowledged the existential threat a penalty might pose.

What did the judge weigh in mitigation?

Justice Moore said the fine would have been higher but for two factors. First, significant remediation efforts are under way. Second, Star has already paid fines for conduct that "significantly overlaps" with the conduct Austrac pursued in these proceedings.

His deterrent message was explicit. "It is important that Star be deterred from ever putting profit over [anti-money laundering] compliance. 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 the risk," he said — before correcting himself in court: it "is not worth the risk". He added: "However, it is also necessary to take into account what has happened to Star since the relevant period, as well as Star's financial position."

Notably, Moore assumed the company would struggle to pay. "Star's profitability is such that it is likely to need to raise money to pay any penalty," he said on Wednesday morning.

Can Star actually pay it?

Chairman Soo Kim, also Star's largest shareholder, contradicted the judge's assumption within hours. Star will not need additional financing or share sales, he said.

"We are fortunate to be in a financial circumstance that's quite a bit different than even 12 months ago," Kim said on Wednesday. He expects the company to meet the instalments from cash on hand, expected incoming payments, and casinos returning to positive cashflow this year.

The confidence is recent. Kim and chief executive Bruce Mathieson Jnr led a $300 million rescue package last year that saved Star from collapse. The deal handed control to Kim's US casino operator Bally's, while the Mathieson family's pub empire took a significant stake after contributing $100 million.

Star's shares entered a trading halt before the judgment and remained halted pending a formal response. Trading is expected to resume on Friday.

What did the regulator say?

Austrac chief executive Brendan Thomas welcomed the ruling but flagged the damage the failures concealed.

"Due to The Star's admitted deficiencies in monitoring, we cannot know how much money high-risk customers pumped through its casinos," Thomas said. "But we do know the risks involving significant amounts of money and instead of closing the door to those risks, The Star's operations exposed the casino and Australia's financial system to them."

What about the workers?

The United Workers Union pressed for review if the penalty endangered jobs. "Nobody is suggesting that serious compliance failures should go unpunished. But accountability must not come at the expense of thousands of workers who had no part in those failures," UWU director Pat O'Donnell said.

"The uncertainty at Star over the years has caused enormous anxiety for our members, their families and the broader network of hospitality businesses that depend on these venues. It would be devastating if this uncertainty were to continue ricocheting through their lives."

How did we get here?

Star's troubles began in 2021, when investigations by The Age, The Sydney Morning Herald and 60 Minutes alleged the company had enabled suspected money-laundering, organised crime, large-scale fraud and foreign interference at its Australian casinos for years — despite board-level warnings that its anti-money laundering controls were failing. Subsequent inquiries cost the company its casino licences and triggered a legal battle with the corporate regulator, alongside Austrac's action.

For practitioners, the judgment signals that Federal Court penalties for AML breaches will be calibrated against capacity to pay, prior overlapping fines and remediation — but not trimmed below deterrence. The message, per Justice Moore, is that profit-first compliance is not worth the risk.