The sector has been plagued by a slew of regulatory inquiries in Australia and the development highlights casino firms' shortcomings in managing strict oversight of alleged money laundering at their gambling hotspots.
The Australian Transaction Reports and Analysis Centre (AUSTRAC) launched a probe in June into Star's casino in Sydney amid concerns over ongoing customer due diligence and compliance with laws.
Local media later reported on a confidential review that accused Star of failure to curb fraud and money laundering at its two resorts.
The investigation into Star will now include multiple entities under the company, AUSTRAC said on Friday, declining to comment further as the probe was ongoing.
The company said earlier in the day that it would fully co-operate with AUSTRAC's investigation.
Star's larger rival Crown Resorts has also faced misconduct inquiries in every state it operates in.
Crown on Thursday received a $6.5 billion buyout proposal from U.S. private equity firm Blackstone Inc. Star itself had approached Crown for a deal last year before backing out over regulatory concerns.
Star's shares fell as much as 1.7% by afternoon trading, while the broader market was down about 1%.
(Reporting by Indranil Sarkar and Harshita Swaminathan in Bengaluru; Editing by Bernard Orr, Devika Syamnath and Shounak Dasgupta)