Key Moments:
- Phillip Dong Fang Lee has filed a lawsuit against Star Sydney for A$57 million ($37 million), alleging the casino exploited his gambling addiction and language limitations.
- Regulators in 2022 found Star Entertainment prioritized high-roller revenue over anti-money laundering requirements, leading to its license suspension and ongoing regulatory oversight.
- The Star Entertainment Group reported a AU$471.5 million statutory loss in FY25 and faces further financial instability after failing to secure covenant waivers on a A$430 million loan.
Lawsuit from High-Profile Patron Targets Star Sydney
Star Sydney is facing a legal action from billionaire and frequent gambler Phillip Dong Fang Lee, who is seeking A$57 million ($37 million) in damages for losses allegedly incurred as a result of the casino exploiting his gambling addiction and challenges with English. According to the lawsuit, Lee was induced to sign documents he did not fully comprehend, enabling Star Sydney to extend large lines of credit to him. Lee stated that this practice contributed to his ongoing gambling losses, and his limited English proficiency rendered him particularly susceptible to manipulation. He reportedly bought billions of dollars in chips and lost A$57 million over nearly twenty years, wagering more than A$2.25 billion ($1.5 billion) at baccarat.
Revelations from Government Inquiry and the UnionPay Controversy
The case against Star Sydney came to light in 2022 during a New South Wales inquiry into Star Entertainment’s compliance practices. During the investigation, Lee was identified as the top user of the “China UnionPay process”—a mechanism used by Star Sydney to mischaracterize gambling transactions as hotel expenses. Between 2007 and 2021, Lee reportedly transferred at least A$100 million ($66 million) via this now-banned method. Internal communications from as early as 2015 reveal that staff had concerns Lee’s UnionPay activity outstripped his gambling, raising money laundering red flags. Although Lee has not been personally accused of any offense, the inquiry highlighted widespread failures in Star’s oversight of compliance risks.
| Year(s) | Lee’s Chip Purchases | Total Baccarat Wagers | UnionPay Throughput | Star Sydney Revenue Decline |
|---|---|---|---|---|
| ~20 years | A$57 million in losses | Over A$2.25 billion | At least A$100 million | 21.9% |
Addiction, Language Barriers, and Legal Arguments
Lee’s suit stresses that his pathological compulsive gambling rendered him incapable of ceasing play, and his legal counsel claims Star Sydney knowingly enabled and profited from his condition. The lawsuit further asserts that due to Lee’s struggles with English, he misunderstood key documents—believing them to be chip receipts rather than binding credit obligations. Lee’s legal team maintains that Star took advantage of both his addiction and language difficulties to boost profits. Notably, his representatives have pledged to donate any damages earned to charities focused on assisting those with gambling addictions.
Star Entertainment’s Continuing Financial Turmoil
Star Entertainment has been embroiled in ongoing scandals since 2022 related to anti-money laundering failures. Regulatory investigations exposed serious deficiencies in customer due diligence, reporting of suspicious transactions, and partnerships with high-risk junket operators. These issues prompted a suspension of the Star Sydney casino license, the resignation of two CEOs and CFOs, and the imposition of regulatory supervision in New South Wales and Queensland. The company faces a possible AU$400 million federal AML fine and has already paid hundreds of millions in penalties. Star revealed a statutory loss of AU$471.5 million in FY25, with gaming revenue plummeting by 37 percent and Star Sydney revenue alone dropping 21.9 percent due to carded play and cash limitations.
Efforts to turn the business around included a AU$300 million rescue from Bally’s Corporation, asset divestitures, and the search for regulatory waivers, but financial difficulties have persisted. CEO Steve McCann has acknowledged the steps taken towards remediation, yet he warned that continued support is vital for Star’s ongoing viability.
Setbacks with Lender Negotiations
Recently, The Star Entertainment Group’s financial predicament worsened as it disclosed a failure to negotiate covenant waivers for a A$430 million loan with creditors including Deutsche Bank, Macquarie, and Washington H. Soul Pattinson. These waivers would have allowed the company to avoid default despite breaching certain debt terms. In light of these mounting challenges, the group’s future remains uncertain as it seeks avenues for stability.
- Author
Daniel Williams
