Star Entertainment Group Provides $101M for Fines and Penalties
ASIC prompted The Star to provide for fines and penalties of $101 million in its financial report for the half-year ending on December 31, 2022
As a result, the Australian Securities and Investments Commission (ASIC) has prompted The Star to provide for fines and penalties of AUD 150 million ($101 million) in its financial report for the half-year which ended on December 31, 2022.
Star Entertainment Could Be Slapped with Fines of up to $1B
As part of its financial reporting surveillance program, ASIC reviewed The Star’s financial report for the year ended on 30 June 2022. The review revealed that no provision had been made for potential fines and penalties related to non-compliance with anti-money laundering and counter-terrorism financing laws, despite some uncertainties about the amount.
The alleged non-compliances are the subject of an AUSTRAC investigation. According to the financial crimes regulator, Star has been accused of permitting 117 high-risk VIP customers to launder billions of dollars in illicit funds through its casinos for several years, which constitutes a “serious and systemic” violation of the law.
The non-cash impairment charge for fines and taxes for FY23 that Star faces is estimated to be between AUD 400 million ($269.7 million) and AUD 1.6 billion ($1 billion). The company has already been hit with two separate AUD 100 million ($67.4 million) fines by regulators in New South Wales and Queensland for compliance failures.
Following the concerns raised by ASIC, The Star has included provisions amounting to AUD 150 million ($101 million) in the company’s financial report for the half-year, which ended on December 31, 2022.
ASIC’s financial reporting surveillance program aims to improve the quality of financial reporting and to ensure financial reports have been prepared in accordance with the law, supporting investor confidence and the integrity of Australia’s capital markets.
Star Entertainment Faces Class and Regulatory Actions while Considering Asset Sales
Star Entertainment Group’s woes do not stop here. The company faces four class actions, and ASIC is separately pursuing action against former and current directors and executives.
The company’s recent financial report showed an AUD 1.26 billion ($849.6 million) loss in the six months to December 31, 2022, driven by an AUD 988 million ($666.2 million) write-down of its Sydney casino. The group is also considering offloading Brisbane real estate holdings as it attempts to secure its financial future for the next three years.
Star Entertainment Group is one of Australia’s largest casino operators, with properties in Sydney, Brisbane, and the Gold Coast. It is a significant contributor to Australia’s economy, providing jobs and tourism revenue. However, its recent troubles with compliance failures are a significant blow to its reputation and are leading to a loss of investor confidence.
Silvia has dabbled in all sorts of writing – from content writing for social media to movie scripts. She has a Bachelor's in Screenwriting and experience in marketing and producing documentary films. With her background as a customer support agent within the gambling industry, she brings valuable insight to the Gambling News writers’ team.
