Judgment day looms for Star casino as court decides size of fine
The Federal Court will rule this week on the penalty Star Entertainment must pay for anti-money laundering breaches that could threaten its survival.Summary
The Federal Court is set to decide this week how large a fine Star Entertainment must pay for repeated breaches of anti-money laundering laws, which led to the suspension of its casino licences in NSW and Queensland. AUSTRAC argued a penalty of $400 million would be appropriate, while Star contended that anything above $100 million, payable within 12 months of the hearing, would be challenging given its available liquidity options, including access to equity markets. Justice Cameron Moore is due to hand down his judgment on Wednesday morning, a day after shareholders meet for the company's annual meeting in Sydney. It will be shareholders' first, and possibly last, chance to meet new chairman Soo Kim and chief executive Bruce Mathieson Jnr, who led the $300 million rescue package that saved Star from financial collapse last year. A heavy fine could push the company into administration. The rescue handed control to Kim's US casino operator Bally's, with the Mathieson family pub empire also securing a significant stake after contributing $100 million. Star's troubles began in 2021 when an investigation 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 for years despite warnings that its anti-money-laundering controls were failing. Subsequent inquiries led to the loss of its licences, a legal battle with the corporate regulator and action by AUSTRAC. Gambling revenue has fallen and regulatory costs have mounted. This year, further reporting raised questions about Star's commitment to reforms, and a leaked recording captured executives complaining about risk and compliance measures, with Mathieson Jnr saying the fines are disproportionate and "all we're doing is existing to pay a fine." Last month, NSW Independent Casino Commission chief Philip Crawford extended the suspension of Star's licence, saying serious recent allegations regarding governance, leadership and culture remained under scrutiny despite the casino's progress.
(Source：The Sydney Morning Herald)