It adds to an investigation by ASIC as well as two state-based inquiries which raised serious breaches of anti-money laundering laws in NSW and Queensland.

Last week Star also responded to a show cause notice from the Attorney General over the allegations in Queensland. It faces the possibility of losing its licence and a maximum $100 million fine.

Star’s response to the show cause has not been revealed.

The potential fines over the AUSTRAC proceedings were high. Westpac ended up paying $1.3 billion for its anti-terrorism and money laundering breaches, although the company’s capacity to pay is much lower than that of the banks.

AUSTRAC, which is responsible for preventing, detecting and responding to criminal abuse of the financial system, said the civil penalty proceedings followed an industry-wide compliance program that started in 2019 which led to an investigation into Star’s activities in 2021.

In 2022, that investigation expanded into the allegations surrounding activities in Queensland and other Star entities.

AUSTRAC chief executive Nicole Rose said casinos must take anti-money laundering obligations seriously and its allegations were extensive, including that Star failed to appropriately asses the money laundering and terrorism financing risks they faced, including the likelihood and impact of those risks.

Among a long list of allegations raised by AUSTRAC was that Star also failed to identify and respond to those risks.

AUSTRAC said in the absence of these risk-based controls, the Star entities were vulnerable to criminal exploitation and its failure to manage the risks exposed the Australian and global financial system to systemic money laundering and terrorism financing risk over many years.

It also failed to establish an appropriate framework for the board and senior management oversight of the anti-money laundering and terrorism financing programs.

In the absence of that oversight, Star entities permitted customers to move money through payment channels that were not transparent and involved high risk of money laundering and terrorism financing.

“(Star) did not understand the sources of money moving through these channels or whether there was any risk that the source of funds was illicit,” AUSTRAC said.

“(It) failed to consider whether it was appropriate that they continue an ongoing business relationship with higher risk customers.

“Criminals will always seek to exploit the financial system to launder their money and harm the community. Businesses, as the front line of defence of our financial system and our communities, are often the first to be alerted to criminal activity,” Rose said.

Star said the statement of claim does not detail the quantum of the penalty sought by AUSTRAC.

It said it took its anti-money laundering obligations seriously and had co-operated with the AUSTRAC investigation.

Star chief executive Robbie Cooke said the company was transforming its culture.

“We are committed to improvement but there is a lot still to do,” Cooke said.

“Our goal is to earn back the trust and confidence of AUSTRAC and all our regulators.”