Australia’s Federal Court has found two former Star Entertainment Group executives in breach of the Corporations Act 2001, ruling on 5 March 2026 that they failed to manage money-laundering risks and properly inform the board. The decision concludes civil penalty proceedings that have been running since December 2022 and marks another chapter in the operator’s multi-year regulatory reckoning.
The ruling was handed down by Justice Lee as part of proceedings initiated by the Australian Securities and Investments Commission (ASIC). The court found that a former chief executive and managing director, and the company’s ex-chief legal and risk officer, did not take adequate steps to address anti-money laundering (AML) risk at the casino group. They also failed to bring those risks to the board’s attention as required.
Four Years to a Finding
ASIC commenced proceedings on 12 December 2022, naming 11 former directors and officers of The Star Entertainment Group. The regulator alleged breaches of section 180 of the Corporations Act, which requires directors and officers to exercise the degree of care and diligence that a reasonable person in that position would bring to the role.
The primary issues before the court were the adequacy of Star’s AML policies and the sufficiency of senior management’s oversight and reporting in relation to money laundering and associated criminal activity risks. The court’s focus throughout was on whether those at the top of the organisation met the statutory standard in addressing vulnerabilities that had been identified.
Justice Lee concluded that two of the 11 named executives were personally in breach of those obligations. The remaining nine former directors and officers were not found to have breached their duties. That outcome underlines the court’s view that the highest personal accountability sat with the executives directly charged with legal, risk, and executive oversight functions.
Penalties Not Yet Set
Under the Corporations Act, civil penalty breaches of this type can attract fines of up to AU$1.05 million per breach and potential disqualification from holding directorships. As of the ruling, the court had not yet imposed specific penalties on either executive. That phase of the proceedings remains outstanding.
The case reinforces a pattern of regulators pursuing individual accountability in gaming compliance failures, rather than limiting enforcement to corporate-level penalties. As explored in recent analysis of rising non-compliance costs across multiple markets, the personal exposure now carried by executives in regulated gaming environments has materially shifted.
AUSTRAC Action Already in Motion
The ASIC ruling does not stand alone. In June 2025, AUSTRAC, Australia’s financial intelligence agency, sought a AU$400 million fine against Star Entertainment following a separate investigation into AML violations spanning several years. That investigation identified failures ranging from insufficient transaction reporting to inadequate managerial oversight across the group’s casino operations.
The dual-track enforcement, with ASIC pursuing directors personally and AUSTRAC targeting the corporate entity for systemic AML failings, reflects the scale of governance breakdown the two regulators identified at Star. The company sits alongside a small group of major casino operators globally to have faced coordinated regulatory action on this scale. The £18 million in penalties issued by the UK Gambling Commission in 2025 demonstrates that enforcement intensity is rising across jurisdictions, though the Star proceedings represent an extreme on the spectrum of corporate and individual accountability.
New Leadership, Persistent Scrutiny
The Federal Court ruling coincided with another Star announcement: the appointment of John Koster as chief executive of The Star Sydney, subject to regulatory approval. Koster, a veteran with more than 40 years in the casino and hospitality sector, most recently served as Regional President for Caesars East, overseeing three Atlantic City properties. His appointment follows a period of significant leadership churn, with Bruce Mathieson Jr. serving as group CEO following Bally’s Corporation and Investment Holdings’ acquisition of a combined 61% controlling stake in the group late in 2025.
The NSW Independent Casino Commission extended The Star Sydney’s licence suspension until 31 March 2026. That deadline frames the immediate challenge for Koster and the broader leadership team: demonstrating to regulators that the governance structures which produced the failures now being adjudicated have been credibly dismantled and replaced. The penalty determination in the ASIC case, when it comes, will set a further marker on the personal cost of those failures for the executives involved.
Source: Australian Securities and Investments Commission
