With the Australian Transaction Reports and Analysis Centre (AUSTRAC), casino operator Crown Resorts Ltd. has agreed to pay a substantial fine of AUD450 million (US$293.5 million). At the Crown Melbourne and Crown Perth casinos, prior violations of anti-money laundering and counter-terrorism financing (AML/CTF) rules were the subject of a settlement designed to end civil penalty proceedings. The agreement, which must be approved by a federal court, is an important step in resolving the legal issues that surround the company’s activities.
Historical Non-Compliance
The admitted facts and facts that were agreed upon highlight cases concerning Macau-based junkets and overseas deposit services that Crown Resorts patrons received at City of Dreams Macau until October 2016 and City of Dreams Manila until May 2017. Melco Resorts and Entertainment Ltd., a Nasdaq-listed business that runs casino resorts, offered these services.
Crown Resorts stated that the federal court will consider the settlement, including the suggested penalty, during a hearing scheduled for July 10 and 11. The agreement between Crown Resorts and AUSTRAC must be approved by the court in order to be finalized.
Transformation and Commitment
Ciarán Carruthers, CEO of Crown Resorts, emphasized how different the current organization is from the business that committed the prior violations. He emphasized Crown Resorts’ commitment to harm reduction and its goal to lead the world in offering secure gambling and entertainment. The company has put in place extensive steps to boost regulatory compliance since October 2020 and has invested over AUD40 million to improve financial crime compliance. Future financial years will see the addition of more sizable investments.
Expanded Compliance Team
As part of its efforts to improve compliance, Crown Resorts has added about 170 specialists from a variety of industries, including banking, gaming, regulation, and law enforcement agencies to its financial crime and compliance team. The purpose of this strategic addition of knowledge from Australia and other countries is to strengthen the company’s systems and procedures.
Penalties from the past and the future
Due to Crown Resorts’ failure to follow anti-money laundering and counter-terrorism funding legislation, Australian authorities has threatened to penalize the company in 2020. The fines associated with these problems now total AUD680 million thanks to the penalty that was agreed upon with AUSTRAC. The agreement with AUSTRAC is a significant step forward for Crown Resorts in its mission to make up for its past mistakes and promote a compliance and accountability culture.
Connection to Macau
In the statement of admitted facts and agreed facts, Crown Resorts acknowledged that there were greater risks of money laundering and terrorism funding when providing gaming-related services through junkets. The deal made known the high-profile Macau-based junket brands’ participation in junket programmes at Crown Melbourne and Crown Perth between March 2016 and March 2020, including Suncity, Meg-Star, and Guangdong Group. Additionally mentioned in the statement were the foreign deposit services offered by Crown Melbourne and Crown Perth via the City of Dreams casinos in Macau and Manila, respectively, from October 2016 to May 2017.
Melco Resorts’ Role
According to the jointly signed statement, Crown Melbourne and Crown Perth rely on City of Dreams Macau and City of Dreams Manila to verify the identity of patrons making deposits of money. On deposits made through the City of Dreams deposit services, however, neither Crown Melbourne nor Crown Perth conducted source of funds checks. It is uncertain how thoroughly City of Dreams Macau or City of Dreams Manila performed these checks.
Several Macau casino resorts, notably Crown Macau (now Altira Macau) and City of Dreams Macau, were developed by Melco Resorts, a casino brand that was launched in 2004 as a joint venture between Melco International Development Ltd and Crown Resorts.
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