Crown agrees to $450m Austrac fine for anti-money laundering breaches at its casino

The agreement follows months of negotiation, and breaches of gambling laws over more than a decade at Crown’s Melbourne casino.

Crown Resorts had faced fines of up to $22.2m per breach. Picture: William West / AFP.

Casino giant Crown has agreed to a $450m penalty over anti-money laundering and counter-terrorism breaches at its Melbourne and Perth operations.

As its Sydney VIP-only casino ramps up, the agreement with financial crimes regulator Austrac bookends a protracted negotiation between the two parties and follows breaches of gambling laws over more than a decade at Crown’s Melbourne casino.

As part of the settlement, Crown has admitted its casinos failed to appropriately assess the money laundering and terrorism financing risks they faced, and to identify and respond to changes in risk over time.

They did not have appropriate controls and had failed to established a framework for the board and management to have oversight of the AML/CTF program.

Crown also did not have a transaction monitoring program that was appropriate to the nature, size and complexity of the business and its customer program also lacked procedures that could ensure risk customers were subject to extra scrutiny.

Austrac chief executive Nicole Rose said: “Crown’s contraventions of the AML/CTF Act meant that a range of obviously high-risk practices, behaviours and customer relationships were allowed to continue unchecked for many years.”

Ms Rose said Crown is responding to failures and is working with Austrac to fix the issues.

A court hearing has been set down for July 10-13, at which the presiding judge will consider the parties’ proposed settlement and if its is appropriate.

Crown has separately copped $230m in fines from Victorian gambling regulators since May last year, and is the subject of other ongoing investigations.

Crown – which private equity group Blackstone acquired for $8.9bn last June, ending the Packer family’s long links to the casino operator – had spent recent months at the negotiating table with the financial crimes regulator over the penalty.

It had faced maximum fines of up to $22.2m per breach. Under the terms of the takeover, Blackstone had an exit clause if the penalty was more than $750m. That made it comfortable enough to proceed with the transaction.

The Australian had flagged in January the fine was likely to amount to “hundreds of millions of dollars” rather than eclipsing $1bn.

Crown Resorts chief executive Ciarán Carruthers said on Tuesday he was focused on ‘Future Crown’ after apologising for the ‘unacceptable historical failings’.

“The company that committed these unacceptable, historic breaches is far removed from the company that exists today,” Mr Carruthers said.

“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,” he said.

‘Future Crown’ is a multi-year transformation program focused on whole-of-company reform, adding to the measures in place since October 2020.

The quantum of the Crown fine has been subject to intense speculation since the regulator launched action against Crown in the Federal Court last March.

Over the past five years, Austrac has agreed to penalties with Westpac and the Commonwealth Bank of $1.3bn and $700m respectively. Westpac and CBA separately settled their Austrac matters ahead of the cases being fleshed out in the Federal Court.

The Federal Court often takes into account the financial viability of a company when determining a penalty or signing off on an agreed fine.

Crown opened the doors of Sydney’s VIP-only casino last year in August, more than a decade after James Packer dreamt up the idea over lunch with former NSW premier Barry O’Farrell at media personality Alan Jones’s house.