The Star Said It Could Afford $100 Million. The Court Ordered $260 Million. Here's What Small Firms Should Take From It.

On 28 October 2026 the Federal Court ordered The Star to pay $260 million for breaching Australia's anti-money laundering laws. (AUSTRAC media release, 28 October 2026 (opens in a new tab))

AUSTRAC had asked for $400 million. The Star had argued for $100 million and warned that a bigger penalty could force it into liquidation. Justice Cameron Moore said the first figure was too high and the second too low. (ABC News (opens in a new tab)) The next morning, The Star told the market it accepted the penalty and did not expect the payments to affect its ability to continue as a going concern. (Business News Australia (opens in a new tab))

You don't run a casino, and nothing here means a local practice is looking at a nine-figure penalty. For that, read what firms actually pay. But strip out the private gaming rooms and much of what the court described comes down to questions you now have to answer about your own clients. Where did this money come from? Who else is paying? What did you already know? Can you show you were paying attention?

The Case in Numbers

The split, payment dates and positions are as reported by Business News Australia (opens in a new tab) from the judgment and The Star's ASX announcement.

Why This Judgment Is Different

Most of the famous AUSTRAC numbers were negotiated. Westpac's $1.3 billion, Commonwealth Bank's $700 million, Crown's $450 million and SkyCity's $67 million were all agreed penalties. Justice Moore said that, apart from one case involving a $50,000 penalty, this appears to be the first disputed penalty under the Act. (Business News Australia (opens in a new tab))

So a judge had to work through a contested figure and explain it. The timing matters for the wagering sector too: AUSTRAC's case against Entain is listed for a hearing before the same judge from 30 November. (The Straight (opens in a new tab))

Justice Moore also refused the obvious shortcut. Comparing Star with Crown, he said, "is not of assistance". (Business News Australia (opens in a new tab)) There is no tariff you can read off the last case.

What Pushed the Penalty Up and Down

Up. The conduct itself. "They were not mere oversights from time to time," Justice Moore said, calling it "egregious". (ABC News (opens in a new tab)) He found that "a significant part of Star's business was dependent upon turning a blind eye to customers who presented a high ML/TF risk", meaning money laundering and terrorism financing risk. Junket revenue alone was over $1.4 billion, and revenue from high-risk customers was about $1.33 billion on Star's own calculation. The court was careful to say those figures don't measure the benefit from the contraventions. They illustrate what a non-compliant approach can earn. (AUSTRAC (opens in a new tab))

Down. Star had already been punished. Justice Moore pointed to the $200 million in earlier penalties, the licence suspensions and the external manager, and said that without the state response the penalty "would have been higher". (The Straight (opens in a new tab)) He said the same about the significant remediation under way, and he took its financial position into account. (ABC News (opens in a new tab))

So money troubles and remediation both counted, but neither got Star to the number it wanted. Deterrence pulled the other way. Justice Moore wanted other businesses to hear that this conduct "is not worth the risk". (The Straight (opens in a new tab))

Five Failures That Scale Down

1. Nobody really established where the money came from

AUSTRAC's summary of the failure is blunt: The Star "did not simply fail to complete the right checks. It allowed high-risk customers to gamble without properly establishing where their money came from." (AUSTRAC (opens in a new tab))

The trap at small-firm level is thinking a bank transfer answers the question. AUSTRAC says it doesn't: the source of funds "isn't 'the customer's bank account'", it's the underlying source, such as wages or business income. (AUSTRAC, source of funds and source of wealth (opens in a new tab)) Your checks should match the risk, and sometimes the answer is obvious, like a bank loan funding a property purchase. But for a high-risk client you must apply enhanced due diligence. (AUSTRAC, enhanced CDD (opens in a new tab)) And if you are required to establish source of funds during initial due diligence and can't, you must not provide the service. (AUSTRAC (opens in a new tab)) Our source of funds guide covers what to ask for.

2. Money arrived from people nobody had identified

The gambling channels in this case allowed third-party transactions and cash deposits where the third party's identity wasn't recorded. (AUSTRAC (opens in a new tab))

This one translates easily. A property deposit paid by someone who isn't the buyer. A company's fees settled from a relative's account. A cash payment towards a piece of jewellery. None of these is automatically suspicious, and parents help their children buy homes every day. The point is that someone should ask, and write the answer down. AUSTRAC's example is that if a customer says the funds came from a third party, it's appropriate to record information about that original transaction, and you could verify it with bank statements or similar documents. (AUSTRAC (opens in a new tab))

For cash, AUSTRAC notes that a bank statement showing a withdrawal doesn't prove the cash in front of you came from that withdrawal. (AUSTRAC (opens in a new tab)) One of its suggested controls is simply to cap cash or ask for bank transfer or EFTPOS only. (AUSTRAC (opens in a new tab))

3. It already knew, and carried on

This is the part that turned a compliance failure into something much worse. Justice Moore said Star "continued to receive and profit from money that evidence available to it suggested was most likely from criminal activity". AUSTRAC says it kept courting customers who had been excluded from gambling in another state, and let junkets keep using private rooms despite its own concerns. (AUSTRAC (opens in a new tab))

A small firm's version is quieter: a news story about a client, a colleague's uneasy feeling, another firm that declined the work, a file note that says "bit odd" and goes nowhere. Adverse media is one of AUSTRAC's listed examples of what could trigger verifying a client's source of funds or wealth. (AUSTRAC (opens in a new tab)) And once you have reasonable grounds for suspicion, a suspicious matter report is due within 3 business days, or 24 hours for terrorism financing. (AUSTRAC, suspicious matter reports (opens in a new tab)) Be careful what you say to the client along the way, because tipping off is a separate offence.

A concern with a recorded decision is defensible, even if the decision was to keep acting. A concern with nothing after it is the worst thing you can have on file.

4. The money made it easy not to look

Justice Moore said there is "a strong financial incentive" to engage in this conduct, because casinos can benefit when money flows in with limited friction and limited scrutiny. (AUSTRAC (opens in a new tab)) Every commercial business has a small version of this problem. It's the biggest client, the developer who sends you ten files a year, the referral source nobody wants to annoy.

AUSTRAC's guidance gives you the tools, if you are willing to use them. Enhanced due diligence should include active steps, not just more monitoring, including declining a service that falls outside your risk appetite, and you may need to escalate decisions to senior management. (AUSTRAC (opens in a new tab)) Your compliance officer must have sufficient authority, independence and resources to do the job. (AUSTRAC, compliance officer (opens in a new tab)) In a small firm that person may also be the partner who brought the client in. So write down who decides on a high-risk client before the awkward one arrives. A higher risk rating isn't an automatic no, but it does need a real decision.

5. Nobody could say how bad it was

This may be the most telling line in the release. "Due to The Star's admitted deficiencies in monitoring we cannot know how much money high-risk customers pumped through its casinos," said AUSTRAC CEO Brendan Thomas. The court found the non-compliance undermined the ability of AUSTRAC and law enforcement "to trace money to its source". (AUSTRAC (opens in a new tab)) Justice Moore described the number of contraventions as "immeasurable". (ABC News (opens in a new tab))

The declarations show how this adds up. Both companies contravened the Act each time they began providing a designated service while their joint program was non-compliant. (Business News Australia (opens in a new tab)) That finding was made on the Act as it stood before the 2026 reforms, so don't read it straight across. The practical warning survives, though: a weak program isn't one mistake on one day.

Your monitoring only has to suit your business, and it doesn't have to involve expensive software. But AUSTRAC does expect you to monitor all customers receiving a designated service and to be able to demonstrate that it works. Failing to monitor flows on into suspicious matter reports, enhanced due diligence and your risk ratings. (AUSTRAC, how to monitor your customers (opens in a new tab)) A dated review note on each high-risk client is a modest start, and we've written up how to do it without software.

The Bill Doesn't Stop at the Penalty

The Star's current owners say they had nothing to do with this conduct. Chairman Soo Kim said so in the same statement that accepted the penalty. (Business News Australia (opens in a new tab)) The companies are paying anyway. If you are buying a practice through its company, the company's compliance history comes with it, so ask about it.

The other costs are easy to miss:

• Time. AUSTRAC opened its investigation in June 2021. (WellPlayed (opens in a new tab)) The last instalment falls due by May 2028, nearly seven years later, for conduct going back to 2016.
• Lenders. The size and terms of the penalty are a review event under The Star's credit facility. The company says it is confident the facility will remain available. That is its own assessment, and we can't test it from the outside. (Business News Australia (opens in a new tab))
• Individuals. In a separate matter in June, Star's former CEO and lawyer were collectively fined more than $1.1 million under the Corporations Act and disqualified from holding a corporate office for six and seven years respectively. (ABC News (opens in a new tab))

What to Do This Week

You can do all of this without a consultant:

1. Pull your high-risk clients. For each one, check there's a recorded source of funds answer that goes beyond "their bank account".
2. Look for third-party payers. Check your last few files with money involved. Who actually paid, and is that on the file?
3. Find your loose concerns. Search your notes and ask your staff what has made them uneasy. Each one needs a recorded decision, and possibly a suspicious matter report.
4. Name the decision-maker. Write down who decides on a high-risk client, especially when that client is a big earner for the person deciding.
5. Put monitoring in the diary. Set the date you will next review each high-risk client, then keep the note when you do.
6. Fix gaps now, and date the fix. Remediation counted in The Star's favour. Your own evidence of fixing things is better made today than reconstructed after a letter from AUSTRAC.

Where AML Mate Fits

AML Mate is built for the small-firm version of this work: a risk assessment and program matched to what you actually do, client due diligence that leaves a dated record, and reminders for the reviews that are easy to let slide. If you aren't sure where you stand, the free compliance check starts with which designated services you provide, and doesn't need a signup.

This article is general information, not legal advice. It relies on AUSTRAC's media release of 28 October 2026 and on media reports of the judgment and of The Star's ASX announcement. We didn't have the full reasons when writing, so check them before relying on any detail. The conduct predates the 2026 reforms. For advice specific to your circumstances, consult a qualified AML/CTF professional.