The Star says it will survive $260 million fine, despite earlier collapse warning

The Star says it will survive its massive fine for historical money laundering offences, despite previously warning a penalty of greater than $100 million could collapse the business.

The casino was fined $260 million in the Federal Court on Wednesday, four years after financial intelligence agency AUSTRAC launched legal action against the company.

On Thursday, the multimillion-dollar business said accepted the fine, despite previously warning that any penalty over $100 million would threaten its survival.

AUSTRAC had argued a $400 million penalty was necessary to punish what it said were “manifest failures” at Star.

Justice Cameron Moore determined a $260 million penalty was appropriate for the significant harm Star’s conduct has caused.

“In effect, Star put profit ahead of compliance,” the judge said.

The Star chairman Soo Kim, who was appointed late last year as US operator Bally’s took control of the business in a rescue package, said the casino is looking to rebuild its relationship with the agency.

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“Given that the current ownership and management team had nothing to do with the actions that gave rise to the proceedings, we commend the work of AUSTRAC and the Federal Court,” Kim said.

“The Star looks forward to fostering a positive relationship with AUSTRAC and to demonstrating that The Star today has the right leadership, internal culture, and operational processes to eliminate the kind of behaviours that the penalty is meant to dissuade.”

“It is great to get a determination yesterday and add this to the list of challenges The Star, under its new board and leadership team, has navigated,” he said.

The business will pay the $260 million fine over four instalments across 19 months – something it said it can afford.

“The Star does not consider that the payment of the penalty in accordance with the instalments required by the Federal Court will impact the group’s ability to continue as a going concern,” it said in an update to investors.

In an interview with the Australian Financial Review, Soo insisted the casino’s warning that a fine of more than $100 million could collapse it wasn’t a bargaining tactic.

“I wish I was so clever,” he said.

He said the warning had been “based on a set of facts that are no longer accurate because things change quickly”.

‘Now the rebuilding starts’

Star, which owns casinos in Sydney and the Gold Coast and operates another in Brisbane, has spent years engulfed in scandals and licence suspensions tied to money laundering, organised crime infiltration, and widespread governance failures.

In one instance in the money laundering case which Wednesday’s fine was handed down for, a patron with known criminal links was allegedly permitted, alongside numerous other high-risk gamblers, to funnel hundreds of millions of dollars through the casinos.

The court heard these red flags fell on the deaf ears of senior management, who failed to enforce adequate anti-money laundering and counter-terrorism financing controls.

US gaming giant Bally’s Corp stepped in to save the embattled operator from administration in April 2025, paving the way for its chair, Kim, to take the helm at Star.

Addressing shareholders at the company’s annual general meeting on Tuesday, Kim declared that the “fire is out”.

“I didn’t come here to say ‘mission accomplished’,” Kim said.

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“I came here to say the fire is out, and now the rebuilding starts.”

Kim added that the vast majority of patrons were not involved in any wrongdoing and should still be welcomed by the venue.

The AGM follows a string of recent regulatory penalties.

In June, former Star chief executive Matthias Beikir was fined $700,000 for failing to notify the board of suspicious transactions linked to Chinese junket operator Suncity in 2018 and 2019.

That same month, Star Sydney was handed $10 million in fines for regulatory breaches, which included breaching patron time limits and failing to vet customers for ties to criminal and terrorist networks.

– with AAP