Crown Melbourne and Crown Perth will pay a combined $450 million fine for failings in their anti-money laundering and counter terrorism financing processes over several years.
Australia’s financial crimes watchdog AUSTRAC launched civil penalty proceedings against the two casinos in March 2022 and the two parties submitted a proposal for a $450 million fine to the court in May. Crown will pay the fine over two years.
As part of the court case, Crown admitted that it had “operated in contravention” of the government act that deals with protecting again money laundering and terrorism financing. Broadly, the programs Crown had in place for its casinos in Melbourne and Perth were not based on appropriate risk assessments and the systems and controls to manage these risks were inadequate and lacked oversight from those sitting at the top level of Crown, including its board.
With the proceedings wrapping up this week, AUSTRAC highlighted more details of Crown’s breaches, which included continuing a relationship with a major casino junket operator until despite being aware of allegations the operator was linked to organised crime. Junket operators typically bring customers to the casino and in the process facilitate large financial transactions across borders. Crown no longer works with junket operators.
Crown also failed to appropriately monitor billions of dollars of transactions, including overseas payments, meaning the casinos were less able to identify and report suspicious activity.
“$450 million is one of the largest penalties ever ordered against a casino globally,” said AUSTRAC’s acting CEO, Peter Soros.
“It serves as a clear warning to anyone who provides casino or gaming services in Australia that they must have strong AML/CTF compliance systems and processes that meet their obligations, to protect the Australian community and their businesses from serious financial crime.”
“The casino industry by its very nature, faces serious risks of exploitation by criminals seeking to launder the profits of their illicit enterprises. These criminals are making their money by harming the community, whether by running scams, selling illicit drugs or trafficking innocent people.
“AUSTRAC is committed to ensuring all regulated businesses, as our first line of defence, do their part in the fight against financial crime and will not hesitate to take enforcement action when serious failings are identified.”
AUSTRAC is currently undertaking similar penalty proceedings against The Star Entertainment Group, which has casinos in Melbourne, Brisbane and on the Gold Coat, and SkyCity Adelaide, who are facing similar allegations to Crown.
Crown Resorts CEO Ciarán Carruthers highlighted the changes in progress for the casino business. Crown Resorts ownership also passed into new hands in mid-2022, after US private equity group Blackstone agreed to acquire it.
“Under new ownership and leadership, we have introduced sweeping reforms as part of our Future Crown transformation program and invested tens of millions to bolster financial crime compliance and embed global best practice for the gaming sector.
“There is no place for money laundering or terrorism financing at Crown or in our communities.”