Star Entertainment money-laundering investigation expanded
The Australian gaming business announced in a statement to the Australian Securities Exchange (ASX) that it had been notified by the Australian Transaction Reports and Analysis Centre (Austrac) of a wider scope for its enforcement investigation that commenced last June.
The government-run national financial intelligence agency last year raised allegations related to money laundering activities against a number of leading land-based casino operators in the country, including Star Entertainment, Crown Resorts and SkyCity Entertainment Group.
According to today’s (14 January) update from Star Entertainment, Austrac has advised that it has not made a decision regarding the appropriate regulatory response that it may apply to The Star, including whether or not enforcement action will be taken. Austrac has advised that it will request information and documents from The Star as part of its investigation.
Star Entertainment said in a statement: “The Star takes its anti-money laundering obligations very seriously and will fully co-operate with Austrac in relation to its requests for information and documents and the investigation.”
Star Entertainment owns and operates The Star Sydney, The Star Gold Coast and Treasury Brisbane. It has also acquired the Sheraton Grand Mirage on the Gold Coast in a joint venture and is developing the Queen’s Wharf Brisbane project.
Star Entertainment said last June that the investigation into its operations was related to the Star Sydney property, with potential non-compliance related to concerns regarding ongoing customer due diligence, adopting and maintaining an AML/CTF programme and compliance with such a programme.
Austrac identified the issues in a compliance assessment conducted in September 2019, which focused on the casino’s management of customers identified as high risk and politically exposed persons over the periods 1 July 2015 to 30 June 2016 and 1 July 2018 to 30 June 2019.
Austrac, which monitors financial transactions in order to identify money laundering, organised crime, tax evasion, welfare fraud and terrorism financing, said the allegations against the gaming groups relate to “serious non-compliance” with the Australian Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act) and the Anti-Money Laundering and Counter-Terrorism Financing Rules Instrument 2007 (AML/CTF Rules).
In September 2021, the New South Wales Independent Liquor and Gaming Authority announced an investigation into the Star Sydney after concerns were raised about its interactions with junkets and money laundering prevention measures.
In October, Star Entertainment rejected media reports suggesting it had ignored a report by KPMG over supposed failings at the business related to money laundering. A joint investigation from the Sydney Morning Herald, the Age and 60 Minutes alleged the group allowed suspected money laundering, organised crime, large-scale fraud and interference at its casinos for years, despite warnings its anti-money laundering controls were failing.
New South Wales is in the process of setting up an Independent Casino Commission (ICC) and implementing a series of legislative reforms aimed at preventing criminal activity related to casino operations in the wake of the Bergin Inquiry Report into Crown, which was released in February 2021.
Crown was deemed unsuitable to operate its casino at Barangaroo in central Sydney in February 2021, after an inquiry found evidence that its facilities and accounts were used for money laundering, in addition to engaging with junket operators with alleged connections to organised crime.