Crown Resorts, one of Australia’s leading casino operators, is bracing for a significant financial blow after lodging a joint submission with the financial regulator, AUSTRAC, to the Federal Court regarding some major AML failings. The submission proposes a staggering $450 million penalty for Crown Resorts’ anti-money laundering (AML) and counter-terrorism failings at its establishments in Perth and Melbourne.
Crown Resorts CEO, Ciaran Carruthers, expressed deep regret over the company’s past failings and issued an apology on behalf of its new owners and leadership. He emphasised that the company has undergone substantial transformation and is now committed to harm minimisation and striving to become a global leader in safe gambling and entertainment.
The proposed penalty, subject to consideration and approval by the Federal Court, marks a significant step in addressing the unacceptable breaches of AML and counter-terrorism financing obligations. Crown Resorts is focused on its “Future Crown” reform program, which aims to enhance its approach to risk management and financial crime compliance.
The penalty, if approved, will be one of the largest in Australian corporate history, underscoring the severity of the breaches. It accounts for approximately 5% of Crown’s last listed market capitalisation before it was taken private by Blackstone Capital for $8.9 billion in May last year.
AUSTRAC chief executive, Nicole Rose, stressed that Crown’s contraventions of the AML/CTF Act allowed high-risk practices, behaviours, and customer relationships to persist unchecked for many years. She commended Crown’s efforts to respond to the failures identified in the proceedings, highlighting the company’s investment in enhancing its approach to money laundering and terrorism financing risk management.
The penalty faced by Crown Resorts highlights the urgent need for robust AML measures in the casino sector. Rival Star Entertainment Group also awaits a potential AUSTRAC penalty for similar failings. AUSTRAC continues to emphasise the risk of organised criminals exploiting the casino sector to launder illicit funds.
The impact of the proposed penalty on Crown Resorts is substantial, equaling the cost base of Star Sydney, another major player in the industry. Star Entertainment has set aside a provision of $150 million in anticipation of a potential AUSTRAC penalty, which accounts for approximately 10% of its market capitalisation.
These developments demonstrate the importance of implementing comprehensive AML software solutions to prevent financial crimes and ensure compliance. The use of advanced technology, such as AML software offered by technology companies like Verify 365, situated in Sydney, and can help organisations automate tasks, streamline compliance processes, and mitigate the risk of money laundering and other illicit activities.
Verify 365’s cutting-edge AML software provides sophisticated algorithms and comprehensive databases that enable efficient customer due diligence, sanctions screening, ongoing monitoring, and digital verification. By automating these tasks, organisations can expedite compliance procedures, reduce human error, and bolster their defences against financial crimes.
As the casino sector faces increasing scrutiny, it is imperative that organisations prioritise the implementation of robust AML software solutions to meet regulatory requirements and protect against potential penalties. By partnering with industry-leading providers like Verify 365, businesses can enhance their risk prevention strategies and demonstrate their commitment to a secure and compliant environment.
“Verify 365’s technology is specifically designed to meet AUSTRAC’s requirements, and our solutions empower businesses in Australia to navigate the complex landscape of AML and KYC compliance more efficiently.” said Ardi Melikian, Director at Verify 365 Australia.
“By automating tasks such as customer due diligence, sanctions screening, ongoing monitoring, and digital verification, Verify 365’s solutions expedite compliance procedures, minimise the risk of human error, and ensure accuracy in the prevention of money laundering and other illicit activities. As the casino sector faces increasing scrutiny, it is imperative that organisations prioritise the implementation of robust AML software solutions to meet regulatory requirements and protect against potential penalties.” added Ardi.
