AUSTRAC says casino junkets unable to be regulated

The financial crimes watchdog says the responsibility of managing dodgy junkets lies squarely with casino operators.

The financial crimes watchdog says managing dodgy gaming junkets for potential money laundering is the responsibility of the casino and not the regulator.

At Senate estimates on Friday, AUSTRAC chief executive Nicole Rose said casino junket operators posed a major risk of embezzling funds, but it was up to individual gaming companies to assess whether overseas tour groups were compliant with Australia’s anti-money laundering and counter-terrorism financing laws.

While acknowledging gaps in regulation of the casino cash cows that bring in overseas high roller gamblers, Ms Rose said the “industry was well placed to manage and assess its own risks”.

“AUSTRAC does not regulate junket tour operators,” Ms Rose said.

“The onus is on industry to ensure it complies with its AML/CTF obligations. The Federal Court has also reiterated this view.”

Labor senator Kristina Keneally questioned AUSTRAC why significant gaps in legislation had not been addressed despite the regulator flagging junkets posed a significant money laundering risk.

Labor senator Kristina Keneally questioned AUSTRAC over the gap in money laundering regulation. Picture: NCA NewsWire / Gary Ramage

“Someone can come in on a junket with money from god knows where and distribute to god knows who afterwards. It just seems a massive gap in the regulation,” Senator Keneally said.

Ms Rose said “domestic regulation won’t address the issues”, as the overseas companies fell outside of domestic laws.

Junkets have been at the centre of a NSW Independent Liquor and Gaming Authority probe into Crown Resorts. The inquiry is determining if the gambling giant should retain a gaming licence for its $2.2bn Sydney Barangaroo casino.

Crown Resorts has been at the centre of a junket scandal. Picture: NCA NewsWire / Jenny Evans

It has been alleged Crown turned a blind eye to money laundering activity conducted by its major junket partner Suncity at its Melbourne casino, where hundreds of millions of dollars of tainted funds were exchanged for gaming chips at the cash desk.

It has been widely reported junkets based in Hong Kong and Macau had links to organised crime syndicates.

Crown in November cancelled all dealings with junket tour operators.

AUSTRAC admitted there was a lack of consistency around state gaming bodies regulating junkets. Only Queensland makes junkets obtain an approval licence to operate in the state.

The Victorian Commission for Gambling and Liquor Regulation has previously said anti-money laundering issues are a matter for AUSTRAC and not state gaming bodies.

AUSTRAC has known junket operators have been a money laundering risk since at least 2017.

Ms Rose said it would be “preferable” if all state gaming bodies implemented licensing regimes for junket operators.

Originally published as AUSTRAC says casino junkets unable to be regulated