Australian AML Watchdog Opens Probes into Three Casino Firms


Australia’s anti-money laundering watchdog has expanded the scope of an ongoing probe into due diligence at the nation’s casinos to now include the three biggest operators of gambling establishments.

The Australian Transaction Reports and Analysis Centre (AUSTRAC) has been investigating Crown Resorts’ AML practices for months. The agency said on Monday that it is now also looking into possible violations of background check rules at Crown rival The Star Entertainment Group and New Zealand-based operator SkyCity Entertainment Group.

Crown has been the subject of heavy scrutiny since a 2019 bombshell investigation by local news outlets that alleged the company had poor AML controls and links with Asian organized crime. These allegations prompted an 18-month New South Wales inquiry led by former Supreme Court Judge Patricia Bergin.

The findings of the probe resulted in Crown being unfit to run a casino at its newly opened Crown Sydney luxury integrated resort and in the launch of royal commissions in two more states and further investigations.

The Bergin Inquiry further sparked an AUSTRAC probe which the agency expanded to Crown’s resort in Perth on Monday.

With the watchdog also expanding its investigation to cover the other two casino operators, casinos in Australia’s five most populous cities now face possible fines or restrictions on their licenses, if they are found to be violating AML and due diligence rules.

AUSTRAC Probe May Hamper Star Bid for Crown

Of the new probes, AUSTRAC CEO Nicole Rose said in an editorial published in The Australian that the nation’s casino sector “is at risk of criminal misuse due to the products and services they offer.” The official went on that they have an “enforcement investigation under way at Crown casino that demonstrates the seriousness of our concerns” and that they also have “significant compliance work” under way on the entire casino sector.

All three casino companies said in Monday market filings that the agency has voiced concerns over how they manage “customers identified as high risk and politically exposed persons”, that AUSTRAC is yet to decide whether to take enforcement action, and that they would cooperate fully over the course of the investigation.

Meanwhile, experts noted that the probe could complicate the Star’s proposed merger with Crown that would create a A$12 billion ASX-listed casino powerhouse.

Intelligent Investor portfolio manager Nathan Bell said that if AUSTRAC identifies systematic and ongoing lackadaisical attitude to enforcement then [a regulator objection]

seems likely.”

He went on that if “Star is seen to have good standards and there is a genuine effort to weed out these people then… the regulators would rather Crown was kept in Australian hands and Star’s takeover proposal would remain live.”

Source: Australian financial crime watchdog widens probe on casinos already reeling from COVID, Reuters, June 7, 2021