June 7, 2023 (Investorideas.com Newswire) In a significant move towards resolving its legal woes, Crown Resorts, one of Australia's largest casino operators, has agreed to a historic $450 million penalty over breaches of the country's anti-money laundering laws at its Melbourne and Perth casinos. The agreement, formed with the Australian Transaction Reports and Analysis Centre (AUSTRAC), marks a watershed moment in the ongoing saga of Crown Resorts' regulatory transgressions.
As part of the settlement, Crown Resorts has openly admitted that it operated in contravention of the Anti-Money Laundering and Counter-Terrorism Financing Act. The company acknowledged that it failed to assess the money laundering and terrorism financing risks facing its casinos and did not have suitable risk-based systems in place to mitigate these risks. Furthermore, it confessed to not having a transaction monitoring program that was appropriate for the nature, size, and complexity of its business. The casino operator also admitted to not conducting suitable ongoing customer due diligence on a range of specific customers who presented higher money laundering risks.
Crown Resorts CEO, Ciarán Carruthers, described the decision as a "significant step" in rectifying the company's past failings. Carruthers asserted that the company takes its responsibility seriously to the community, law enforcement, the industry, and stakeholders to ensure that they continue to comply with their AML/CTF obligations. He stated, "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 behaviour." Crown is now committed to implementing these reforms to make itself a better business and lift the standards for the entire industry.
The proposed $450 million penalty will require the final approval of the Federal Court in July. If approved, this fine would be the third-largest in Australian corporate history, following Westpac's $1.3 billion and Commonwealth Bank's $700 million fines for breaches of anti-money laundering laws. "Resolving high stakes requires accountability and reform. Crown Resorts' historic $450 million payout signals a commitment to rectify past failings and raise the standards for the entire industry." a spokesperson from FruityKing.co.nz commented.
This penalty comes after Crown Resorts' years-long ordeal with royal commissions in Victoria and Western Australia, and a judge-led inquiry in New South Wales. These investigations found Crown to have facilitated money laundering and partnered with operators linked to organized crime. The casino was deemed unsuitable to hold a gaming license in all three states. Crown's contraventions of the AML/CTF Act led to the continuance of high-risk practices and behaviours unchecked for many years.
This agreement will also have implications for Crown Resorts' ownership. In 2022, Crown Resorts was purchased by global private equity group Blackstone for $8.9 billion. The terms of the takeover allowed Blackstone to exit the deal if the penalty was greater than $750 million. With the agreed penalty falling well short of that figure, Blackstone will likely continue to hold ownership of Crown Resorts.
As Crown Resorts navigates this high-stakes resolution, it is a stark reminder of the weight of regulatory compliance in the gambling industry. It remains to be seen how this agreement will impact Crown's future operations, but the company's commitment to rectifying its past failings and improving its AML/CTF compliance could set a precedent for others in the industry.
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