Crown Resorts Isn’t Only Australian Casino Operator to Act Irresponsibly, Asserts AUSTRAC

The level of drama surrounding Crown Resorts is enough to make soap opera writers envious, but it now appears that the casino operator’s actions may have only been part of a larger, more widespread issue. Crown has been under investigation by regulators across Australia for money laundering, machine tampering, and much more as its ability to hold a casino license has become tenuous. However, the country’s financial watchdog, the Australian Transaction Reports and Analysis Centre (AUSTRAC), now believes that Crown may not have been alone. Even as Crown faces new accusations of corporate irresponsibility, AUSTRAC has announced that it is starting to take a closer look at Star Entertainment Group, SkyCity Entertainment Group, and a bank, National Australia Bank Ltd (NAB).

Australia’s Casino Scene Rife with Manipulation

AUSTRAC CEO Nicole Rose wrote an op-ed piece that was published in The Australian last week, highlighting the fact that Australia’s casino market is “at risk of criminal misuse.” She confirmed that Crown is under investigation, and the watchdog later said in a separate announcement that Star and SkyCity, as well as the bank, are being investigated, as well. The entities have confirmed the investigations and asserted that they are willing to assist AUSTRAC, although it wasn’t clear if the investigation into NAB was related to those of the casinos.  

The exact nature of the investigations hasn’t been revealed but is apparently tied to compliance failures and a “serious” breach of anti-money laundering and terrorism financing regulations. Morningstar analyst Angus Hewitt says that it is “obviously not good news for the embattled casinos,” adding that, depending on the outcome, operators, at a minimum, will likely face fines for any wrongdoing. AUSTRAC hadn’t indicated when the investigations began or how long they might last.

Crown Investigation Extended

The revelation that Australia’s casino industry might be off-kilter won’t do much to deflect the negative publicity Crown continues to receive. It continues to demonstrate that it has a pattern of instability and a willingness not to follow the rules, with its Crown Perth property now being scrutinized. As a result of the ongoing investigations Crown has been subjected to, it was revealed that the property might have mishandled its oversight of certain individuals that should have been considered “high risk” gamblers. The company also allegedly violated the Casino Control Act, allowing over $124 million (AUD$160 million) to be accessed at its Crown Melbourne through credit or debit cards. Those revelations are reportedly independent of the AUSTRAC investigation, which only further compounds the damning evidence against Crown.

Several entities have stepped up recently to try to buy out Crown and save it from further embarrassment, especially after it was found unsuitable to hold a casino license in New South Wales. Oaktree Capital Management got everything started, but no offer seemed to have the same chances of being accepted as an offer by Star a month ago. However, if Star is found to be conducting itself in a similar manner as Crown, that deal will likely never be approved. On the other hand, if Star is found not to have violated any regulations, it should gain more ground and could ultimately be an acquisition ordered by regulators.