Blog

• Gambling News

Star Entertainment Could Be Wiped Out by Proposed $400M Fine

Australia’s financial crimes regulator AUSTRAC aims to force Star Entertainment to shut down. 

The agency is requesting that a federal court impose a AU$400 million (US$260 million) penalty on the struggling casino operator, which in April accepted a AU$300 million (US$195 million) rescue package from Bally’s Corp. and Australian bar and slots tycoon Bruce Mathieson. 

AUSTRAC initiated civil penalty proceedings against the company in November 2022 for purported violations of anti-money laundering (AML) and counter-terrorism financing regulations. 

Criminal Organizations 

Since 2022, Star's Sydney license has been suspended following a regulatory investigation that determined it had permitted criminal gangs to utilize its venue for money laundering in exclusive high-roller junket areas. 

The Bally’s-led rescue occurred on the exact day that financially troubled Star was expected to exhaust its funds entirely due to a severe liquidity crisis. 

Star's Sydney license has been on hold since 2022 after a regulatory investigation determined it permitted use by criminal organizations for money laundering in exclusive high-roller junket areas. 

The operator deceitfully allowed Chinese high rollers to withdraw AU$900 million (US$586 million) for gambling with China UnionPay (CUP) credit cards, misrepresenting these transactions as “hotel expenses.” 

In a Federal Court session on Wednesday, Simon White SC, who represents AUSTRAC, contended that a penalty of AU$400 million would be warranted given the extent and length of Star's compliance shortcomings. Star had previously cautioned that a AU$100 million penalty might threaten its capacity to operate as a viable business. 

“If you want to run a casino, you’ve got to put in place very costly and significant systems, processes and controls,” said White, as reported by The Australian. “There was a manifest failure on the part of Star to do that and that warrants this court imposing a very high penalty, much higher than $100 million.

“An oppressive penalty, we accept, is not appropriate but $400 million is not an oppressive penalty in this case. It’s an appropriate penalty for specific and general deterrence purposes,” he added.\

$266 million Suncity Loan Facility 

On Thursday, the court was informed that Star committed “countless” breaches of AML laws, including establishing fraudulent business connections with 117 high-risk clients. The firm has acknowledged that 70 of these clients – comprising junket funders, operators, or players – represented a significant money laundering risk. 

Included in this group was Alvin Chau, head of Macau's Suncity junket, who received a credit line from the casino totaling up to AU$266.67 million (US$174 million). This is in spite of Australian officials raising alarms regarding Chau's alleged connections to organized crime, particularly the 14K triads, as early as 2017. 

Star permitted Suncity to discreetly run an unbranded VIP area, called "Salon 95," which persisted even after former Star CEO Matt Bekier informed regulators that his firm had ended its business relationship with the junket. 

In January 2023, a Macau court sentenced Chau to 18 years in prison for criminal association and unlawful gambling.