Former Star chief executive Matthias Bekier failed to inform the company's board of suspicious conduct committed by Chinese junket operator Suncity in 2018 and 2019, the Federal Court found in March.
Mr Bekier and former Star general counsel Paula Martin have been successfully sued by the Australian Securities and Investments Commission for breaches of their duties.
On Wednesday, Justice Michael Lee imposed the penalty on Mr Bekier, finding the casino boss headed an organisation that had been allowed to operate despite its inherent risks as long as it remained vigilant.
"When it came to Star, that vigilance was found wanting," the judge said.
The casino's corporate governance failures emerged because its overseers didn't "blow the trumpet" when they saw "the sword coming", he added.
The judge also hit Ms Martin with a fine of $400,000.
Mr Bekier was banned from managing corporations for six years while Ms Martin was banned for seven years.
Lawyers for ASIC originally sought a $1.3 million fine against Mr Bekier and a $1.1 million fine against Ms Martin at a hearing in May.
However, the corporate watchdog previously agreed to much lower penalties of $180,000 for former chief casino officer Greg Hawkins and $60,000 for former chief financial officer Harry Theodore over similar misconduct.
Mr Hawkins and Mr Theodore were banned for 18 months and nine months, respectively.
Justice Lee said this "light touch" and the overly generous deal inked had ultimately reduced the penalties he imposed on the former casino boss and chief lawyer.
In March, Justice Lee found Mr Bekier and Ms Martin did not inform Star's board of the risks posed by Suncity in 2018 and 2019.
This conduct included bundles of cash being delivered to the service desk in blue cooler bags or cardboard boxes and junket staff hiding under blankets to stay out of the view of CCTV cameras.
Both were also aware of a misleading email to lender National Australia Bank in 2020 about concerns gamblers were using their China UnionPay cards for gambling, which was prohibited by the foreign card scheme.
Junkets and their international VIP players were highly lucrative to Star, bringing in tens of billions of dollars to the business annually.
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