In a significant development, Blackstone-backed casino operator Crown Resorts has agreed to pay a $294 million fine to the Australian Transaction Reports and Analysis Centre (AUSTRAC) for breaking anti-money laundering (AML) regulations at its Melbourne and Perth casinos. This fine, if accepted by the federal court at hearings set for July 10 and 11, would rank third in terms of the amount ever levied against an Australian company.
Acknowledgment of Wrongdoing
Crown Resorts acknowledged operating in violation of the Anti-Money Laundering and Counter-Terrorism Financing Act as part of the settlement. The corporation admitted that it had miscalculated the risks of money laundering and terrorism funding in its casinos and had implemented risk-based procedures insufficiently to reduce these risks.
Critical Compliance Gaps
Crown Resorts also acknowledged that it lacked a transaction monitoring programme that was appropriate for the nature and complexity of its business. Additionally, it admits to not performing sufficient continuous customer due diligence on a few high-risk people who may have consequences for money laundering.
According to ABC News, Ciarán Carruthers, CEO of Crown Resorts, expressed satisfaction with the arrangement by saying, “The company that committed these unacceptable, historic breaches is far removed from the company that exists today.”
Deep Investigation and Findings
Due to royal commissions in Victoria and Western Australia, as well as a judge-led inquiry in New South Wales, Crown Resorts, which was previously controlled by billionaire founder James Packer until being sold to Blackstone last year, has come under scrutiny. The Bergin investigation came to the conclusion that Crown assisted in money laundering and interacted with figures connected to organized crime. As a result, it was decided that the casino was unfit to hold gambling licenses in all three states.
Nicole Rose, CEO of AUSTRAC, highlighted the seriousness of Crown’s offences by stating that “Crown’s contraventions of the AML/CTF Act meant that a range of obviously high-risk practices, behaviors, and customer relationships was allowed to continue unchecked for many years.”
Consequences of the payment
If accepted, the payment would increase Crown’s total fines to AUD 680 million ($444.9 million), since the business was accused of ignoring organized crime and worker safety during trials that started in 2020. After Westpac Banking Corp. and Commonwealth Bank of Australia, it would be the third-largest fine in Australian corporate history.
Acquisition and Exit Terms by Blackstone
In June of last year, the international private equity firm Blackstone finalized the purchase of Crown Resorts for AUD 8.9 billion ($6.2 billion). A provision in the takeover agreement gave Blackstone the right to withdraw from the transaction if the fine surpassed AUD 750 million ($490.2 million).
Prior sanctions and legislative action
In November, Crown was fined AUD 120 million ($77.7 million) by the Victorian Gambling and Casino Control Commission (VGCCC) for breaking its responsible service requirements. The Victorian gambling watchdog then levied an additional AUD 30 million ($19.6 million) penalties in April for allowing clients to cash bank checks made out to themselves, aggravating gambling-related harm and perhaps assisting “criminal infiltration by money launderers.”
Crown Resorts confronts the task of repairing its reputation and proving a dedication to strict compliance measures in the future as the effects of these AML breaches continue to be felt.
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