A pair of executives from Star Entertainment, a company that owns and operates casino and integrated entertainment resorts throughout Australia, have been found guilty of breaching the Corporations Act.
Former CEO and MD Matthias Bekier and former chief legal and risk officer Paula Martin were found in breach of duties in relation to the handling of risks associated with money laundering and criminal activity.
Star shares down on announcement as company faces questions
Delivering his judgement from more than 500 pages of reasons, Justice Michael Lee eviscerated the board for failing to address what he described as a “dysfunctional and unethical” culture within the company.
Star Entertainment shares closed 4.2% lower at A$0.115, their weakest finish since February 1, even as the benchmark stock index (.AXJO) rose 0.4%.
Australian Securities and Investment Commission (ASIC) chair Joe Longo said the finding should lead to some serious questions about leadership at the company.
He said in a statement: “ASIC pursued this case because of the fundamental questions it raised about trust, governance and accountability at one of Australia’s largest casino operators. The Court found that senior executives have a critical responsibility to identify serious risks, ensure those risks are properly managed, and escalate them to the board.”
He added the commission will carefully consider the judgement before issuing penalties: “We acknowledge that the Federal Court found the non-executive directors did not breach their duties in this case. ASIC will always require directors and executives to meet the highest standards of corporate governance because of the crucial role they play in maintaining trust,
“Given the length of the judgment, ASIC will carefully consider its implications as these proceedings move to the penalty phase.”
Stringent allegations by ASIC formed bedrock of case
The case was brought to a federal court after AISC alleged a long list of infractions by the company over the course of a number of years.
Allegations included how Bekier and Martin failed to adequately address money-laundering risks linked to the casino operator’s dealings with Asian gambling junket Suncity and its financial backer. The court found the executives continued working with the junket despite reports of possible criminal connections.
Suncity was Star’s largest junket partner, generating turnover of about $2.1 billion in the 2017 financial year, $4 billion in 2018 and $5.9 billion in 2019. Regulators said the scale of the relationship heightened the need for strong oversight and risk management.
The court also found the pair did not properly escalate money-laundering concerns related to the junket relationship to Star’s board. Regulators said the failure limited the board’s ability to assess and respond to the risks.
Separately, the court said Martin allowed misleading statements to be given to National Australia Bank about the use of China UnionPay debit cards at ATMs inside Star’s casinos. According to ASIC, more than $900 million was withdrawn by Star customers using the cards between 2013 and 2019, despite rules prohibiting their use for gambling.
In his verdict, Justice Lee said: “It appears not a single person within the management of Star, or its board, ever paused to reflect and ask the question as to whether the approach adopted by Star (to) facilitate the use of the cards in this way was moral or ethical in the circumstances.”
Bekier and Martin could face significant consequences
Breaches of the Corporations Act can attract civil penalties, including fines of up to A$1.05 million ($730,000) per violation and potential bans from serving as company directors. The court has not yet determined what penalties, if any, will be imposed.
The court cleared nine other former directors and officers named in the case, instead directing its ire on senior executives responsible for legal and risk controls.
The ruling comes in the same week Star named a new CEO for its Sydney casino in casino industry veteran John Koster.
Koster brings more than 40 years of experience in the casino and hospitality sectors, including over 28 years in senior leadership roles across the United States and the Asia-Pacific region. His previous roles include serving as vice president and general manager at Bally’s Lake Tahoe.
Revenue declines persist but Star Entertainment reduce losses
Last week, Star Entertainment Group reported a narrower loss for the first half of 2026 financial year as cost controls helped offset weaker gaming revenue. Normalised revenue for the six months to.December 31 fell to A$584.9 million from A$650 million a year earlier, while normalised EBITDA showed a A$7.6 million loss.
Statutory revenue reached A$694.6 million, down 4.1% year-on-year, and the company posted a statutory net loss of A$109.7 million. The normalised net loss after tax improved to A$75.7 million, with restructuring, refinancing and regulatory costs totalling A$34 million.
Total revenue declined 10%, driven largely by an 18% drop in gaming revenue amid casino reforms and weaker table games performance. Operating expenses fell 11% due to lower activity, the closure of Treasury Brisbane Casino and reduced corporate overheads.
Star ended the period with A$130 million in available cash and is seeking refinancing through a proposed deal with WhiteHawk Capital Partners. The company must secure financing by March 31 and complete the transaction by May 15 to avoid breaching its current loan terms.
