Australia’s Star Entertainment settles junket tax disputes
Australia’s Star Entertainment Group has settled long-running tax disputes with the Australian Taxation Office (ATO) over the treatment of historical payments made to junket tour operators, bringing an end to a Federal Court battle linked to its former VIP gaming business.
In an Australian Securities Exchange (ASX) announcement released on Tuesday, the casino operator said it had reached an agreement with the Commissioner of Taxation over disputes involving the goods and services tax (GST) treatment of rebates paid to junket operators and the calculation of withholding tax on those payments.
“The Star Entertainment Group Limited announces that it has settled disputes with the Commissioner of Taxation in relation to the GST and withholding tax treatment of payments made by the Group to junket tour operators,” the company said. The disputes covered GST treatment of rebates paid between October 2013 and August 2017, and the method used to calculate withholding tax on payments made between July 2014 and June 2020.
Settlement reduces financial impact
Under the settlement, The Star will recover part of the money it had already paid to the tax authority.
“The Star had previously paid the Commissioner approximately AUD88 million ($61 million) of the disputed amount. As part of the settlement, the Commissioner will refund The Star approximately AUD33 million ($22.9 million),” the ASX filing stated.
The company said it would recognise the remaining amount in its financial results.
“The Star will take a charge of approximately AUD55 million ($38.2 million) for the year ending 30 June 2026,” it said.
The settlement concludes litigation over tax assessments that had exposed the company to claims exceeding AUD160 million ($111 million), and mediation between the parties led to an agreement.
Disputes tied to former junket operations
The tax matters arose from the ATO’s position that The Star had underpaid GST on rebates and commissions paid to junket operators, while also disputing the company’s method for calculating withholding tax on those payments.
The disagreements escalated after the ATO issued amended tax assessments in 2021 and rejected The Star’s objections in 2023. The casino operator subsequently challenged those decisions in the Federal Court.
“The Star ceased dealings with junket tour operators in October 2020,” the ASX announcement said.
The settlement removes another outstanding issue linked to the company’s former reliance on junket operators, whose role in Australia’s casino industry has attracted heightened regulatory scrutiny in recent years.
Recovery efforts continue
The tax resolution comes as The Star continues efforts to rebuild after years of regulatory action over anti-money laundering failures, governance shortcomings and compliance breaches that resulted in heavy penalties and licence restrictions.
Last March, Star Entertainment secured a binding commitment for an AUD550 million ($381.5 million) refinancing facility from funds associated with WhiteHawk Capital Partners. The three-year financing package is intended to refinance existing debt and provide additional liquidity for operations, subject to regulatory approvals and other conditions.
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