• AUSTRAC, the financial crime regulator, probes possible anti-money laundering breaches
• Star faces counter-terrorism law questions at its casino in Sydney
• Investigation follows similar accusations at New Zealand’s Sky City and Crown Resorts
• Star has put in a $9 billion AUD takeover bid for Crown

The Star Casino in Sydney (Photo: llee-wu under CC)

Australian casino giant Star Entertainment is facing a financial investigation from the country’s regulatory body, AUSTRAC.

The probe, looking at possible non-compliance in relation to anti-money laundering and counter-terrorism financial details, is a second big blow to the country’s casino industry.

Earlier this year, Crown Resorts, owned by majority shareholder James Packer, lost its Sydney licence following a similar investigation.

Full co-operation

In a statement released yesterday, Star confirmed it was subject to an investigation from the Australian Transaction Reports and Analysis Center (AUSTRAC). The company stressed it “takes anti-money laundering obligations very seriously” and intends to “fully cooperate with AUSTRAC”. That would include offering up any requested information and documents.

Publicly-listed Star owns several key properties across Australia, including The Star Sydney, The Star Gold Coast and the Treasury in Brisbane.

In an editorial in The Australian newspaper, AUSTRAC CEO Nicole Rose wrote: “The Australian casino sector is at risk of criminal misuse due to the products and services they offer. We have an enforcement investigation underway at Crown casino that demonstrates the seriousness of our concerns. And we also have significant compliance work underway on the casino sector.”

The piece was published just hours before Star confirmed it, too, was under investigation. AUSTRAC confirmed this was the case without commenting further.

Crown Resorts takeover

It is too early to say how this latest development might affect Star’s proposed takeover of rival Crown Resorts. Several potential buyers are said to be circling the empire created by Kerry Packer, which his son James seems to have reluctantly accepted should be sold.

Stock analysts suggest that if Star is found to be in good standing, it would be preferable to secure Crown Resorts, thereby keeping the group in Australian hands.