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Star Entertainment Group has settled two long-running tax disputes with Australia’s Commissioner of Taxation over payments made to junket tour operators, ending Federal Court proceedings that had challenged assessments worth more than AU$160 million combined.
The casino operator confirmed the settlement in an Australian Securities Exchange filing on Tuesday. Under the agreement, the Commissioner will refund Star approximately AU$33 million of the roughly AU$88 million the group had already paid toward the disputed amounts. Star will book a charge of approximately AU$55 million for the financial year ending June 30, 2026, reflecting the portion not recovered.
Two disputes, seven years of contested payments
The settlement covers two separate matters. The first concerned the goods and services tax (GST) treatment of rebates and commissions paid to junket tour operators between October 2013 and August 2017. According to the group’s half-year financial report, that dispute stood at approximately AU$152.4 million as of December 2024, made up of AU$81.9 million in primary tax and AU$70.5 million in interest.
The second dispute involved the method used to calculate withholding tax on junket rebate payments made between July 2014 and June 2020. That claim added a further AU$7.9 million, comprising AU$6.4 million in penalties and AU$1.5 million in interest, per the same report.
The Australian Taxation Office issued amended assessments in August 2021 and rejected Star’s objections in October 2023. Star responded by commencing proceedings in the Federal Court of Australia in December 2023, arguing the tax authority’s interpretation of the rules was incorrect. Both matters had been heading for trial before the parties entered mediation and reached the settlement, which concludes the litigation without a court ruling on the contested assessments.
Star exited the junket business entirely in October 2020, after its historical relationships with junket operators became a central issue in the regulatory reviews that swept the Australian casino sector. Junket operators traditionally arranged high-value gambling trips and handled credit and settlement services for premium players, a model that drew sustained scrutiny over money laundering exposure.
One less legacy liability under new ownership
The resolution removes one of the remaining financial disputes tied to Star’s former VIP business as the company works through a broader recovery. Star, which operates casinos in Sydney, Brisbane and the Gold Coast, is now controlled by Bally’s Corporation and Investment Holdings Pty Ltd following a AU$300 million recapitalisation completed last year.
The company remains subject to suitability processes in both New South Wales and Queensland. Rather than seeking a formal determination of its casino licence status after the ownership change, Star submitted a pathway-to-suitability proposal to the New South Wales Independent Casino Commission (NICC).
Tax and legal settlements have become a recurring feature of the sector’s clean-up phase. Light & Wonder paid $127.5 million to settle the Dragon Train IP claim with Aristocrat in January, while regulators on the other side of the ledger continue to extract penalties for compliance failures, as seen in Betfred’s £825,000 penalty in the UK. In Canada, PointsBet faces a potential suspension over the Porter scandal, a reminder that legacy conduct issues follow operators across jurisdictions.
For Star, the practical effect is a cleaner balance sheet entering FY2027 and one fewer contingency for its new owners to manage. The AU$55 million charge lands in a financial year already shaped by restructuring costs, asset sales and the recapitalisation, and the company did not disclose any additional settlement terms.
Attention now shifts to the outcomes of the NICC suitability pathway and the parallel process in Queensland, which will determine when Star can operate its casinos without the supervision arrangements imposed during the regulatory reviews.
Source: The Star Entertainment Group
