Star Entertainment risks losing Sydney license after inquiry uncovers AML breaches

Star Entertainment could lose its Sydney license or receive a fine of up to A$100 million ($67.2 million) after an inquiry found breaches of anti-money laundering protocols. The embattled Australian casino operator has been given 14 days to explain why it shouldn't face disciplinary action.

The New South Wales Independent Casino Commission (NICC) announced the potential regulatory measures on Friday. The regulator has served the casino giant a disciplinary notice that relates to four significant breaches detailed in a second report released on August 30.

Star is currently "considering the matters raised in the notice" and expects to respond to the regulator by Sept. 27, the operator said in a separate statement. The NICC has also requested information about the company's current financial position and its proposed plans to address these issues on an ongoing basis.

Earlier this year, the NICC launched a second investigation into Star. The regulator raised concerns that the operator had not sufficiently addressed its cultural shortcomings after major AML and counter-terrorism failures were exposed in 2022.

The breaches mentioned in the notice include "a cash fraud against Star, a failure to run source of wealth checks on hundreds of members flagged as high risk, and fraudulent guest welfare entries that put already vulnerable customers at higher risk of harm," the NICC said Friday.

The regulator has given the company 14 days to respond to the "show cause" notice.
Star's license to operate its Sydney casino was already suspended in October 2022 after an inquiry found the company unsuitable to hold a license and ordered it to pay an A$100 million fine.

The company's shares were suspended from trading on September 2 by the Australian bourse operator after Star failed to submit its annual report for fiscal 2024 by the required due date.

The embattled casino operator said in a statement to the ASX late on Wednesday it was continuing to work with stakeholders and advisers about its financial condition. "These discussions are ongoing and involve, among others, state governments, regulators and the company's lenders," The Star said.