AUSTRAC to Begin Investigation Into Casinos


After forcing Australian banks to fork over $2 billion for violating anti-money laundering laws, AUSTRAC is turning its attention to the casino industry. With various casinos coming under fire for money laundering violations, the financial intelligence regulator is looking to put pressure on casinos.

AUSTRAC Investigating Multiple Operators

According to various reports, AUSTRAC is conducting a probe into the financial activities of casino companies. They will investigate SkyCity Entertainment, The Star Entertainment Group, and Crown Resorts. The probe was revealed a couple of weeks ago and the probes came as a result of what AUSTRAC is calling Operation Slalom.

According to these reports, Operation Slalom investigated the counter-terrorism and anti-money laundering programs at various Australian casinos and discovered deficiencies. While the casinos have come out stating that they are terminating high-roller junkets, this is apparently not enough for the financial regulator.

AUSTRAC is claiming that there’s a lack of visibility in the cash operations of various casinos. CEO Nicole Rose was quoted as saying that there’s a range of items that are being looked at. “Casinos have always been high risk for money laundering just because of the nature of their business. And that’s why we need to be so vigilant.”

Casinos Already Served Notices

The above companies mentioned have all received notices from AUSTRAC regarding potential violations. Crown Resorts received a notice for Crown Perth. AUSTRAC is looking at potential violations of money-laundering rules. Star Entertainment is also on notice regarding Star Sydney for similar violations.

Star Entertainment sent a press release regarding the notice. They state, “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.”

SkyCity Entertainment did not let the public know the nature of its notice. However, one can safely assume that is similar in nature to the others.

Did Victoria Probe Play Into AUSTRAC Investigation?

While AUSTRAC is examining all major casino operators in the region, one has to wonder if the recent probe by the Victorian Royal Commission has played a factor. The recent testimony by various members of Crown staff has shed interesting light on the culture of the casino.

First, it appears that various concerns regarding money laundering were ignored by upper management. Management didn’t allow fraud agents the resources to properly do their job, thus resulting in problems over money laundering.

Next, Crown staffers told the Royal Commission that the company has seriously underpaid taxes on pokies. The underpayments are close to AU$200 million. Furthermore, the Royal Commission has made attempts to get financial records disclosing these underpayments, but Crown has not given those documents.

Crown Could Face Double Whammy in Penalties

Crown Casino could be the hardest hit out of the three casino organizations under investigation. The company is already struggling in its attempt to regain its Victoria license. The probe into Crown is extended until October and the funding is being doubled. If AUSTRAC finds irregularities, and one can assume they will, then Crown could be on the hook for more penalties in the way of fines.

One also has to wonder whether potential fines from AUSTRAC will impact the sale of the company. The Blackstone Group buyout plan includes a clause that requires Crown doesn’t lose a license. What happens if the company receives a massive fine? Will that reduce the profitability of the company to a point where companies will back out?

For now, we will have to see what AUSTRAC is planning to do and whether they plan to impose fines comparable to what they’ve issued to banks. Meanwhile, the next couple of months could be tumultuous for gambling companies in Australia.