Regulatory Scrutiny and Investigations
Australia’s second-largest casino operator, Star Entertainment, is grappling with a series of financial and regulatory challenges following accusations of money laundering and fraud. The company, which operates major casinos in Sydney, Brisbane, and the Gold Coast, has faced intensified scrutiny from Australian financial regulators and state authorities over the past four years.
In late 2021, media reports revealed that an internal review had found serious lapses in the company’s ability to curb illicit financial activities within its resorts. The New South Wales (NSW) government responded by launching a public inquiry, while the Australian Transaction Reports and Analysis Centre (AUSTRAC) began investigating potential breaches of anti-money laundering (AML) laws at Star’s Sydney casino. By January 2022, AUSTRAC had expanded its probe to include possible violations of counter-terrorism laws across all of Star’s properties.
In March 2022, the regulatory pressure led to the resignation of Star’s CEO, Matt Bekier. Shortly thereafter, Queensland state authorities initiated their investigation into the company’s practices. In September 2022, Star was officially deemed unfit to hold a casino license in NSW. The regulatory challenges culminated in December 2022 when the Queensland government imposed a staggering A$100 million penalty on the company.
Leadership Shakeups and Financial Decline
Star Entertainment’s ongoing struggle to meet regulatory standards led to a second NSW inquiry in early 2024, which further criticized the company’s governance. The mounting pressure resulted in the resignation of both the newly appointed CEO and CFO. To navigate the regulatory storm, Star brought in Steve McCann, the former CEO of Crown Resorts and Lendlease, in June 2024.
However, Star’s troubles persisted. By August 2024, regulators once again deemed the company unfit to hold a Sydney casino license. Around the same time, the company missed its annual financial reporting deadline by a month. In response to its financial distress, Star’s corporate lenders agreed to extend a debt facility of up to A$200 million to help sustain operations. Despite this, in October 2024, the NSW gaming regulator imposed another fine of A$15 million against the company.
By the end of December 2024, Star Entertainment’s available cash reserves had dwindled to just A$78 million, highlighting its dire financial situation. In January 2025, U.S.-based Oaktree Capital proposed a refinancing deal worth A$650 million, offering a potential financial lifeline. However, the company failed to submit its interim financial results by the end of February 2025, raising further concerns about its ability to remain solvent.
Bailout Proposals and Future Uncertainty
In March 2025, Star received a refinancing proposal worth up to A$940 million, along with a A$250 million bridging facility. The company also announced its decision to sell a 50% stake in its Queen’s Wharf Brisbane project to Far East Consortium International and Chow Tai Fook Enterprises, aiming to stabilize its financial position.
Simultaneously, U.S.-based casino operator Bally’s Corp extended a proposal to inject A$250 million in funding through a capital raise. The plan would involve Star Entertainment issuing convertible notes to its senior lenders, providing a potential path to recovery. However, with its regulatory status still in jeopardy and its ongoing financial instability, Star’s ability to regain its footing in the Australian gaming industry remains uncertain.
