Star accepts A$260 million AML penalty
The Star Entertainment Group has accepted an A$260 million penalty for historical breaches of Australia’s anti-money laundering and counter-terrorism financing laws. In an October 29 exchange announcement, the casino operator confirmed that the amount will be paid in four installments over 19 months.
Australia’s Federal Court imposed the penalty on October 28 following proceedings brought by AUSTRAC against The Star Pty Limited and The Star Entertainment Qld Limited. The group said the amount was materially consistent with the provision already recognized in its financial statements.
AUSTRAC’s announcement identified failures to maintain a compliant financial crime program and adequately monitor customers. The findings included deficiencies in verifying customer information, establishing sources of funds and conducting appropriate due diligence.
The regulator also described gambling channels involving third-party transactions and cash deposits where the third party’s identity was not recorded. AUSTRAC said the failures impaired authorities’ ability to trace funds, investigate unlawful activity and recover criminal proceeds.
Star says the payment schedule will preserve its going-concern position
In its October 29 filing, Star said it did not consider that paying the penalty under the court’s installment schedule would affect its ability to continue as a going concern. That assessment represents the company’s stated position.
The amount and payment terms nevertheless constitute a review event under Star’s credit facility agreement with WhiteHawk Capital Partners. The company said discussions with the lender were underway and expressed confidence that the facility would remain available.
The Federal Court considered earlier regulatory consequences when determining the penalty. AUSTRAC noted that Star had already faced financial penalties, casino license suspensions and management supervision following inquiries in New South Wales and Queensland concerning related failings.
Chairman Soo Kim said the current ownership and management team would work to demonstrate improvements in leadership, culture and operating processes. The exchange announcement was authorized by Kim and confirmed the group’s acceptance of the court’s determination.
