Fears that AU$400m AUSTRAC fine will cause Star’s supernova
Australia’s financial crimes watchdog AUSTRAC could push casino operator Star Entertainment close to the brink if it is granted the AU$400m fine it is asking for from the Federal Court.
The Star Sydney saw its licence suspended in 2022 over AML violations but is still allowed to operate. The proposed fine eclipses the AU$300m rescue package that Bally’s agreed to from Bally’s Corp.
During a Federal Court hearing this week, AUSTRAC’s Simon White SC, said: “If you want to run a casino, you’ve got to put in place very costly and significant systems, processes and controls. 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 $100m.
“An oppressive penalty, we accept, is not appropriate but $400m is not an oppressive penalty in this case. It’s an appropriate penalty for specific and general deterrence purposes,” he added. “Those failures were the inevitable result of a corporate culture that prioritised profit over compliance.”
Star committed ‘innumerable contraventions’ of AML laws, welcoming custom from 117 high-risk customers, who came with a money laundering risk.
Mr White added: “The Suncity case study reveals the extent to which management, senior management, abdicated their responsibility. There was a deliberate courting of (money-laundering-terrorism-financing) risks and likely contraventions.”
“They would have the opportunity to gamble that money, get the returns, wash it, do it again,” Barrister Daniel Tynan told Justice Cameron Moore.
It worked with Macau-based junket Suncity to run an unbranded VIP gaming room known as Salon 95 with credit lines of up to AU$266.67m.
Indeed, its high-risk junket business accounted for 14 per cent of the company’s revenue over a five-year period.
