Court Finds Former Star Executives Breached Duties Over AML Failures
Two former senior executives of The Star Entertainment Group breached their duties over the casino operator’s handling of money laundering and financial crime risks, the Federal Court of Australia has ruled, in a case that has drawn significant attention across the iGaming and casino industry.
The decision follows civil proceedings brought by the Australian Securities and Investments Commission (ASIC), which examined governance failures tied to the casino group’s dealings with high-roller junket operators and VIP payment channels. The case comes as The Star continues broader governance and operational restructuring, including the recent appointment of veteran U.S. casino executive John Koster as CEO of The Star Sydney, as detailed in the appointment of John Koster as CEO of The Star Sydney.
The Court ruled that former CEO and Managing Director Matthias Bekier and former Chief Legal & Risk Officer Paula Martin contravened their duties under section 180 of the Corporations Act. However, ASIC’s case against seven former non-executive directors was dismissed, with the Court finding they did not breach their obligations.
Governance Failures Linked to Junket Operations and Payment Channels
The ruling centres on Star’s handling of risks connected to the now-defunct junket operator Suncity Group, which was at the time one of the casino operator’s largest VIP partners within the global casino industry.
According to the Court, Bekier failed to adequately respond to a KPMG report that identified deficiencies in Star’s anti-money laundering and counter-terrorism financing (AML/CTF) processes. He was also found to have inadequately managed risks arising from Suncity’s operations within Salon 95, a private VIP gaming room provided to the junket operator.
The Court further found Bekier did not properly escalate concerns to the board regarding the impermissible use of China UnionPay cards by casino customers.
However, Bekier was not found to have breached his duties in relation to approving expanded credit exposure to certain junket clients or regarding Star’s relationship with businessman Sixin Qin.
Misleading Communications with Star’s Bank
The Court determined that Martin breached her duties through multiple actions related to Star’s dealings with Suncity and the handling of payment methods used by casino customers.
This included failing to properly inform and advise the board about risks linked to Suncity and being involved in misleading communications with National Australia Bank regarding the use of cards issued by China UnionPay.
Evidence showed more than $900m was withdrawn by Star customers using UnionPay cards at NAB ATMs inside Star properties between 2013 and 2019, despite the network prohibiting gambling transactions.
Penalty Phase to Follow
ASIC Chair Joe Longo said the case raised fundamental questions about governance and accountability at one of Australia’s largest casino operators and highlights growing regulatory scrutiny across the iGaming and casino industry.
He said senior executives have a critical responsibility to identify operational risks, ensure they are properly managed and escalate them to the board.
The matter will now proceed to a penalty hearing, where ASIC will seek financial penalties and potential disqualification orders preventing Bekier and Martin from managing corporations.
The case forms part of wider regulatory scrutiny of Australia’s casino sector involving agencies including AUSTRAC and state gaming regulators, particularly around anti-money laundering compliance, junket relationships and cross-border payment channels used by VIP gamblers. Despite these governance challenges, The Star Entertainment Group has recently reported early signs of operational stabilisation, returning to positive EBITDA in Q2 FY26 as trading conditions improved across its casino properties, as detailed in EBITDA Profit in Q2 FY26.
Source: Federal Court of Australia
