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Crown Resorts is bracing to pay what could be one of the biggest financial penalties in corporate history after lodging a joint-submission with the financial regulator to the Federal Court.
Crown and Australia’s financial crimes watchdog, AUSTRAC, have filed joint submissions with the Federal Court to propose a $450 million penalty over Crown’s anti-money laundering and counter-terrorism failings.
Crown Resorts has agreed to pay $450 million for its anti-money laundering and counter-terrorism failings. Credit: Joe Armao
Crown Resorts chief executive Ciaran Carruthers said the group’s past failings were unacceptable and apologised on behalf of its new owners and leadership.
“Today marks a significant step in the process, and we are pleased to have reached this agreement with AUSTRAC, noting that it is still subject to consideration and approval by the Federal Court, and we await that decision,” Carruthers said.
“The company that committed these unacceptable, historic breaches is far removed from the company that exists today. The Crown of today is committed to harm minimisation and becoming the world leader in the delivery of safe gambling and entertainment.”
The company said it was now focused on its “Future Crown” reform program.
“We take seriously the responsibility we have to the community, to law enforcement, to our industry and stakeholders to ensure that we continue to comply with our anti-money laundering and counter-terrorism financing obligations,” Carruthers said.
The penalty will be the third biggest in corporate history if approved. Westpac was fined $1.3 billion in 2020 over its breaches of the Anti-Money Laundering and Counter-Terrorism Financing Act. The Commonwealth Bank of Australia was fined $700 million in 2018.
AUSTRAC chief executive Nicole Rose said the casino sector was at risk of exploitation by organised criminals who seek to clean their dirty money.
“Crown’s contraventions of the AML/CTF Act [Anti-Money Laundering and Counter-Terrorism Financing Act] meant that a range of obviously high-risk practises, behaviours and customer relationships were allowed to continue unchecked for many years,” Rose said.
“Crown has sought to respond to the failures identified in these proceedings by enhancing its approach to money laundering/terrorism financing risk management and investing in its financial crime compliance.”
AUSTRAC was continuing to work closely with Crown to ensure it was “fit for purpose into the future”, she said.
AUSTRAC declined to comment further, noting the matter was before the court. A hearing has been set for July 10-11, when Justice Michael Lee will consider the proposed settlement.
The casino giant, owned by US investment management powerhouse Blackstone, lodged a net loss of $945.4 million for fiscal year 2022 with ASIC in November. The casino operator’s expenses grew from $1.98 billion in 2021 to more than $3.09 billion in 2022. Regulatory costs, coming in at $617.2 million, were the biggest weight on Crown’s books. These costs accounted for the AUSTRAC penalty.
Crown was handed a record-breaking $120 million penalty for failing to encourage responsible gaming at its Melbourne casino by the Victorian Gambling and Casino Control Commission in November, bringing its Victorian penalties to $200 million.
In 2019, an investigation by this masthead and 60 Minutes revealed Crown had been infiltrated by international criminal syndicates and money launderers. Since then, government inquiries in the three states where its casinos operate have ruled it unfit to hold a casino licence, preventing it from opening the high-rise casino at its newest $2.2 billion tower at Sydney’s Barangaroo in late 2020.
Crown was forced to overhaul its board, management and procedures to satisfy the regulators, who approved a conditional licence for Crown to operate its Barangaroo casino in June. The conditional licence is valid until December 31, 2023.
Blackstone took the reins of the casino in July after shareholders voted to accept an $8.9 billion takeover offer in May 2022, ending three years of chaos under former major shareholder James Packer.
Since then, the group said it had invested heavily in anti-money laundering and counterterrorism resources and more than doubled its responsible gaming team.
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