Australian operator The Star faces new investigation over money laundering claims

Australian casino operator Star Entertainment Group (The Star) is set to be investigated by the Queensland gaming regulator over allegations of money laundering, announced Shannon Fentiman, the state’s Attorney-General.

The Queensland's Office of Liquor and Gaming Regulation will work in conjunction with the Queensland police and the anti-money laundering agency AUSTRAC to investigate the Sydney-based company’s operations, which include casinos in Brisbane and the Gold Coast. The measure comes after similar inquires announced in New South Wales, WA and Victoria, reports ABC.net.

Star Entertainment Group’s shares dropped 23% to $3.30 on Sunday after local media published allegations describing “suspected money laundering, organized crime, large-scale fraud and foreign interference” enabled by the company. The company's main rival, Crown Resorts, was hit by similar claims in 2019.

Australian media reported Star's management had been warned that its anti-money laundering controls were inadequate. According to the report by the Sydney Morning Herald, the Age, and 60 Minutes, between 2014 and 2021 the firm wooed high-rolling gamblers who were allegedly linked to criminal or foreign-influence activities.

The media articles pointed towards a report by international auditor KPMG, commissioned by Star and presented to its Board of Directors, outlining supposed failings in Star’s anti-money laundering procedures.

KPMG warned that Star’s AML procedures do “not consider terrorism financing as required by the AML-CTF (anti-money laundering and counter-terrorism financing) Act,” and that its assessments of certain gamblers “appear to understate the level of money-laundering risk.”

Moreover, the company had “no documented money-laundering risk assessment, or risk-assessment methodology” to be applied to Asian junket operators.

While The Star said in a statement to the stock exchange that the media reports were “misleading,” Fentiman described the allegations as “very serious”, and thus merit further investigation. The Star Sydney casino is currently being reviewed by the New South Wales Independent Liquor and Gaming Authority.

"The investigation will consider the appropriateness and effectiveness of Star's due diligence processes in relation to anti-money laundering and how the Star approaches exclusions to ensure people are excluded from all properties where appropriate," said Fentiman.

The state’s Attorney-General further said the government will be considering the outcomes of the various inquiries “carefully” and will make “any necessary changes” to the regulatory framework.

"We will take the appropriate steps to address all allegations with relevant state and federal regulators and authorities," said The Star in its statement. "The Star operates in a heavily regulated industry. We are subject to thorough and ongoing regulatory oversight including compliance checks and reviews across the company’s operations in NSW and Queensland."

The allegations have led to comparisons to Crown's infamous case. Crown has been found unsuitable to hold a license in Sydney pending a variety of changes to its corporate practices, and faces another Royal Commission into its Western Australian casino, Crown Perth.