Background
AUSTRAC brought civil-penalty proceedings against The Star Pty Limited, which operated The Star Sydney, and The Star Entertainment Qld Limited, which operated casinos in Brisbane and on the Gold Coast. Between 30 November 2016 and 30 November 2022, the companies provided gaming and financial services subject to the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth).
Star admitted extensive deficiencies in its joint AML/CTF program and failures to monitor customers for money-laundering and terrorism-financing risks. Liability was substantially agreed, but the parties disputed aspects of the statutory analysis, the proper number and characterisation of the customer-monitoring contraventions, and the appropriate penalty. Star proposed no more than $100 million, while AUSTRAC sought $400 million payable within 28 days.
The Court’s Holding
Justice Moore declared that each Star entity contravened s 81(1) whenever it began providing a designated service while Parts A and B of its joint AML/CTF program failed to comply with applicable statutory rules. The Court also found 1,190 contraventions of s 36(1) by Star Sydney and 327 by Star Queensland, treating the relevant monitoring failures as contraventions associated with each affected customer rather than each individual designated service.
The Court imposed penalties totalling $260 million: $195 million on Star Sydney and $65 million on Star Queensland. Moore J found that Star’s widespread and systemic failures exposed the community and financial system to serious money-laundering and terrorism-financing risks, produced significant financial benefits, and reflected a large-scale preference for profit over compliance. The penalties were nevertheless reduced to account for overlapping state penalties and regulatory action, remediation, management changes, tighter supervision, and Star’s financial position, and were made payable in four instalments over 19 months.
Key Takeaways
- An AML/CTF program that does not satisfy the prescribed rules can generate a contravention each time a reporting entity begins providing a designated service.
- Systemic failures to monitor high-risk customers can attract substantial penalties, particularly where senior management knew of serious risks and the business benefited from inadequate scrutiny.
- Prior regulatory penalties, remediation, close supervision, and financial capacity may affect penalty quantum and payment terms, but do not displace the need for general and specific deterrence.
Why It Matters
The decision is a major contested-penalty ruling under Australia’s AML/CTF regime. It demonstrates the potentially enormous exposure created by defective compliance programs and customer-monitoring systems, while cautioning against deriving a penalty benchmark from earlier cases involving agreed penalties.
For casinos and other reporting entities, the judgment underscores that formal policies are insufficient when business practices allow high-risk funds and customers to avoid meaningful scrutiny. Courts will examine the scale, duration, commercial benefit, senior-management involvement, resulting risk, remediation, and overlapping regulatory consequences when fixing penalties.