AUSTRAC and Crown Resorts settle for AU$450M

Crown Melbourne and Crown Perth, collectively referred to as Crown Resorts or Crown, have reached a settlement with AUSTRAC, the Australian financial watchdog, to pay an AU$450m ($300m) penalty for breaches of the country’s Anti-Money Laundering and Counter-Terrorism Financing Act 2006, the regulator said in a press statement published on its website this morning.

A court hearing would be needed before Crown Resorts may proceed with payment, with one already set down for July 10-11, 2023. The court would also have a say in whether Crown Resorts would pay the penalty and what the size of the final sum would be. The penalty and subsequent settlement are proposed in relation to breaches of the AML/CTF Act pertaining to the company’s Crown Melbourne and Crown Perth properties as mentioned.

AUSTRAC CEO Nicole Rose said that there was a growing danger of the gambling industry being exploited by organized crime, who are constantly seeking to launder dirty money, usually procured from illicit activities, such as human trafficking, drugs, or scams. To this end, the regulator needs to act firmly. Rose said:

Crown’s contraventions of the AML/CTF Act meant that a range of obviously high-risk practices, behaviors and customer relationships were allowed to continue unchecked for many years.

Crown Resorts’ properties were found in numerous breaches. For one, they failed to assess the AML and CTF risks the properties ran. The properties were also slow to move forward with changes over time, the regulatory notice said. Both the Perth and Melbourne properties seemed to lack the appropriate risk-based systems and controls to mitigate and manage AML and TFC risks.

The Board did not have proper oversight of these important programs either. There was no transaction monitoring program that was "appropriate" to the nature, size and complexity of the business, the regulatory statement read. The properties’ due diligence programs did lack the appropriate procedures as well and there was no appropriate ongoing customer due diligence, AUSTRAC concluded.

However, Crown Resorts has made sure that it is responding to regulatory guidance and has been actively seeking to enhance its approach to AML and CTF risk management. Rose confirmed that the company has been investing in its financial crime compliance.

"We continue to work closely with Crown to ensure that their AML/CTF program and systems are compliant and fit for purpose into the future," she concluded.

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