After months of proceedings, Australian operator Crown Resorts and the Australian Transaction Reports and Analysis Centre (AUSTRAC), the country’s financial watchdog, have agreed to a colossal penalty of US$294 million for repeated violations of anti-money laundering and counter-terrorism financing (AML/CTF) laws at Crown’s properties in Perth and Melbourne.
Should the fine be agreed to by the Federal Court during hearings set for July 10 and 11, it would become the third-largest penalty ever for an Australian-based company, and the biggest among casino operators.
Over the course of the proceedings, Crown admitted to numerous shortcomings in its AML/CTF compliance—the company acknowledged that its risk management systems were not up to par, and that it failed to fully assess the AML/CTF risks facing its casinos in the first place.
Crown also said that it knowingly operated the casinos in contravention of the country’s Anti-Money Laundering and Counter-Terrorism Financing Act.
According to ABC News, Crown disclosed that it “did not have a transaction monitoring program that was appropriate to the nature, size, and complexity of their business,” and failed to “conduct appropriate ongoing customer due diligence on a range of specific customers who presented higher money laundering risks.”
In a statement reported by ABC, Crown CEO Ciarán Carruthers, who is less than a year into his tenure, said that the company is “pleased to have reached this agreement with AUSTRAC,” and promised that the old Crown, the one that“committed these unacceptable, historic breaches, is far removed from the company that exists today.”
“There is no place for money laundering or terrorism financing at Crown or anywhere within our communities, and we will continue to invest in developing a sophisticated and robust framework, supported by the right capabilities to combat this illegal behavior,” Carruthers added. “We are committed to implementing these reforms to make Crown a better business and lift the standards for the entire industry.”
Crown has been on a regulatory roller coaster since 2020, when accusations of non-compliance first surfaced. Since then, the company has been deemed unsuitable for casino licensure in separate inquiries from officials in New South Wales, Victoria and Western Australia.
Those licenses were only reinstated conditionally after Crown was acquired by U.S.-based investment firm Blackstone Group in a $6.2 billion deal last June. One of the reasons why regulators were open to giving Crown a second chance was because of the departure of the company’s billionaire founder, James Packer, who is a controversial figure for his own reasons.
AUSTRAC CEO Nicole Rose said in a statement 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,” per ABC.
Rose added that the company “has sought to respond to the failures identified in these proceedings by enhancing its approach to ML/TF risk management and investing in its financial crime compliance.”
Should the fine be upheld in court later this summer, that would bring Crown’s total fines and penalties to $444.9 million, which is very significant, given that there are stipulations from the company’s recent takeover that would allow Blackstone to back out from the deal if the penalties exceeded $490.2 million.
Aside from the recent AUSTRAC ruling, a hefty portion of Crown’s fees came from the Victorian Gambling and Casino Control Commission, which fined the operator a total of $97.3 million across a six-month period from the end of last year to the beginning of 2023.
AML/CTF violations played a factor, but those fines were related primarily to responsible gambling failures, including the offense of allowing gamblers to fund play by cashing self-written checks.