The casino operator allowed China UnionPay cardholders to withdraw cash to bet at its Brisbane and Gold Coast casinos, but recorded those transactions as "hotel purchases" with National Australia Bank.
Using debit cards for gambling isn't illegal in Queensland, but the Chinese lender prohibits the practice.
An inquiry into Star's suitability to hold a casino licence in Queensland has heard the company changed its financial transaction rules in 2016 to conceal the practice.
Acting chief executive Geoff Hogg says it would have been "preferable" to have told regulators more about Star's motivations for the change.
"It's always good to be transparent with the regulator, yes," he told the inquiry on Thursday.
Star believed at the time it had an arrangement with NAB to ensure gambling transactions using ChinaUnion Pay cards were recorded under a merchant code used for "hotel payments".
"It had to happen outside the casino, yes," Mr Hogg said.
He agreed the China UnionPay card was not materially different to a debit card in the way it was explained to him at the time.
And when used for a "front money" account, it was seen as the equivalent of a cash-out transaction.
Earlier, the inquiry heard how Star allowed a patron banned from casinos in NSW and Victoria, and linked to the Italian mafia, to continue gambling in its Queensland venues for years.
The man became one of the top 10 players at the Star Gold Coast after he was banned from Crown Melbourne in 2014 and from The Star, Sydney, by NSW police seven months later.
A Sydney Morning Herald report on the man's alleged links to Italy's 'Ndrangheta gang didn't trigger a Queensland ban either.
At the time, Star management decided not to ban the man because he had not been charged with any crime.
Anti-money laundering general manager Howard Steiner said the man would have been banned under Star's current policies.
"Clearly this is a feature of the compliance strategy or appetite-for-risk culture of the past that does not exist today," he told the inquiry.
Counsel assisting Jonathan Horton, QC, asked Mr Steiner about how Star's anti-money laundering team had been unable to verify if NSW police had banned a female patron because they didn't have a subscription to the media outlet that had reported it.
"This is indicative of an operational sclerosis that may have existed at the time, which is certainly not a feature of today's program," Mr Steiner replied.
The inquiry heard how Star also struggled to verify the identities of banned people because their names were spelt differently in different media reports.
Mr Steiner also admitted he was not aware of any reporting obligations for Star when it gave gifts worth up to $50,000 to individual customers.
When asked if Star giving cash gifts of up to $20,000 to patrons would get the attention of the anti-money laundering team, Mr Steiner said: "Generally not."
He said Star had policies and procedures on gifts, but "discretionary comps" were up to individual casino departments.
"Discretionary comps are probably addressed in various, or should be at least, addressed in the specific documents for those casino departments that are involved in giving those gifts or approving them," Mr Steiner said.
After submissions made by Mr Hogg on Thursday, Mr Horton said matters regarding Star's organisational concerns would be put in writing to them.
The inquiry is adjourned until August 29, giving Star time to respond in writing to these submissions.
