Show cause notices were issued late on Thursday to the licensees of The Star's two Queensland casinos, following the findings of the Gotterson Review last month.
The review found that the Star Gold Coast and the Treasury Brisbane were both currently unsuitable to hold casino licences.
The Star group has until November 25 to show cause as to why disciplinary action should not be taken against it.
Attorney-General Shannon Fentiman said in a statement: "The Gotterson Review highlighted major failings in The Star's operations at The Star Gold Coast and Treasury Brisbane casinos."
The independent review by former Court of Appeal judge Robert Gotterson made 12 recommendations, including that casino laws in Queensland be amended, as a priority, to allow for the appointment of a special manager to increase supervision and integrity of casino operations.
"While it is important that we do not pre-empt the outcomes of these show cause notices, new legislation ensures the government has a range of disciplinary options available following that process, including increased fines of up to $100 million and the appointment of a special manager," Ms Fentiman said.
In October, the attorney-general said the report made "very serious" findings that adversely affect Star's character, integrity and honesty.
The state casino regulator is still investigating organised crime links associated with a key backer of Queens Wharf casino after revelations by the ABC in August.
Ms Fentiman — who ordered the fresh investigation by the Office of Liquor and Gaming Regulation (OLGR) into Chow Tai Fook's suitability as a major shareholder in Star and Queens Wharf — has told the ABC she will release those findings.
The Gotterson Review was announced by Ms Fentiman in June this year after hearings in New South Wales from the Bell inquiry aired allegations of money laundering, fraud and criminal infiltration at Star casino in Sydney.
Its recommendations also include the establishment of regular investigations into the suitability of all Queensland casino licence holders, which would be paid for by casino operators, similar to laws in New South Wales.
Mr Gotterson also recommended improvements to gambling harm, such as mandatory carded play and limits on cash transactions.
Ms Fentiman has said the recommendations would also see cashless gaming in Queensland casinos.
Star's Brisbane licence is to transfer to the $3.6 billion Queen's Wharf casino development in Brisbane's CBD when it opens next year.
