The Australian Transaction Reports and Analysis Centre (Austrac), a government-run national financial intelligence agency, has raised allegations related to money laundering activities against a number of leading land-based casino operators in the country.
Crown Resorts, Star Entertainment and SkyCity Entertainment Group have received notice of the allegations, while the National Bank of Australia (NAB) has also been contacted by Austrac.
Austrac, which monitors financial transactions in order to identify money laundering, organised crime, tax evasion, welfare fraud and terrorism financing, said the allegations relate to “serious non-compliance” with the Australian Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act) and the Anti-Money Laundering and Counter-Terrorism Financing Rules Instrument 2007 (AML/CTF Rules).
Crown said its notice was in reference to its Crown Perth property, with the site having been under investigation since October last year over a potential breach of regulations.
According to Crown, Austrac’s Regulatory Operations branch identified potential serious non-compliance with the AML/CTF Act and AML/CTF Rules, while Austrac having initiated a formal enforcement investigation into the compliance of Crown Perth.
Crown also said it received legal advice a practice that existed at Crown Melbourne between 2012 and 2016 contravened section 68 of the Victorian Casino Control Act 1991. This involved Crown receiving payment from debit or credit cards of international guests at Crown Melbourne’s Crown Towers Hotel, with the funds then made available to the patron for gaming at the casino.
Section 68 of the Act prohibits a casino operator from, in connection with gaming or betting in the casino, providing money or chips as a part of a transaction involving a credit or a debit card. Crown transacted over AUS$160m (£88m/€102m/US$124m) through the process, which ceased in November 2016.
Crown said investigations are ongoing and it has notified the Victorian Commission for Gambling and Liquor Regulation and the Victorian Royal Commission about the issue.
Meanwhile, Star Entertainment said its notice was in relation to the Star Sydney property, with potential non-compliance related to concerns regarding ongoing customer due diligence, adopting and maintaining an AML/CTF program and compliance with such a program.
Austrac identified the issues in a compliance assessment conducted in September 2019, which focused on the casino’s management of customers identified as high risk and politically exposed persons over the periods 1 July 2015 to 30 June 2016 and 1 July 2018 to 30 June 2019.
The Austrac Enforcement Team will now carry out an investigation into the matter, while the agency advised it has not made a decision regarding any regulatory response that it may apply to Star.
“The Star takes its anti-money laundering obligations very seriously and will fully co-operate with Austrac in relation to its requests for information and documents and the investigation,” Star said in a statement.
Elsewhere, SkyCity said its allegations were for potential serious non-compliance by SkyCity Adelaide, again relating to ongoing customer due diligence, adopting and maintaining an AML/CTF Program and compliance with such a program.
Austrac became aware of the issues during a compliance assessment in September 2019, which focused on the casino’s management of customers identified as high risk and politically exposed persons during the period from 1 July 2015 to 30 June 2016 and also 1 July 2018 to 30 June 2019.
The agency has not yet stated what form of regulatory action SkyCity may face, but it will request further information of the operator. SkyCity said will fully co-operate with Austrac during the investigation.
“SkyCity takes its anti-money laundering responsibilities and obligations very seriously,” SkyCity said. “SkyCity has processes and practices in place in its business to detect and prevent money laundering and continually reviews these to ensure it meets all anti-money laundering requirements.”
In addition, Austrac contacted NAB over potential breaches of both the AML/CTF Act and AML/CTF Rules, citing “potential serious and ongoing non-compliance” with customer identification procedures, ongoing customer due diligence and compliance with part of its AML/CTF program.
Austrac’s enforcement team has initiated a formal enforcement investigation into NAB, but stated it is not considering civil penalty proceedings and that this decision is “reflective of the work undertaken” by NAB to date.
NAB noted that referral to Austrac’s enforcement team follows regular engagement by the bank with the agency “over a long period of time”, both to report issues and keep Austrac informed of progress in uplifting and strengthening the group’s own AML/CTF program.
The bank added that it has invested approximately $800m as part of a multi-year program to improve its financial crime and fraud controls and has more than 1,200 people dedicated to managing financial crime risks.
“NAB takes its financial crime obligations seriously,” NAB chief executive Ross McEwan said. “We are very aware that we need to further improve our performance in relation to these matters. We have been working to improve and clearly have more to do.
“NAB has an important role in monitoring and reporting suspicious activity and keeping Australia’s financial system, our bank and our customers safe.
“It is a key priority for everyone at NAB to uplift our financial crime capabilities, minimise risk to customers and the bank, and improve operational performance. That’s why we are so focused on getting the basics right every time to protect our customers and our bank.”