Federal budget banks Crown’s Austrac fine as future asset

The budget has banked potential windfall fines set to be levied against Crown Resorts after the gaming giant was hit with Austrac charges after alleged anti-money laundering failures.

The budget has banked a potential windfall fine set to be levied against Crown Casino after the gaming giant was hit with AUSTRAC charges after alleged anti-money laundering failures. Picture: William West/AFP

The commonwealth is already banking what is expected to be a significant penalty against James Packer-backed Crown Resorts – noting the financial windfall in this year’s budget papers.

Marked as a contingent asset, the penalties are set to further fatten government coffers which have enjoyed a string of financial penalties from corporate wrongdoing in recent years.

This comes after Austrac – the nation’s financial transactions regulator – hit Crown with civil penalty orders in early March for alleged serious contraventions of anti-money laundering and counter terrorism financing.

Austrac alleges a litany of failings at the casino group, including improperly assessing customers for money laundering and terrorism financing risks and failing to undertake appropriate due diligence. Each breach could attract a fine of up to $22.2m, although it is expected to take into account Crown’s market size.

How much the penalty could be – or what the government’s estimates about the potential windfall may end up – are not detailed, with budget papers noting “the outcome of this matter is unknown, including whether any penalty is imposed by the court”.

However, budget papers note contingent assets are only included if estimates are “greater than $20m in any one year, or $50m over the forward estimates period”. The size is likely to be far more, with recent Austrac action against Westpac and Commonwealth Bank topping $2bn after the banks were hit for anti-money laundering failures.

Any fine over $750m could derail an $8.9bn takeover bid for the casino operator lobbed by American private equity firm Blackstone. Crown has not made a provision for a fine in its accounts, meaning any penalty will come directly from its bottom line.

The budget papers also show Austrac will see a lift in funding from $455m in the 12 months to the end of June to $467m for the coming financial year.

Potential penalties against Star Entertainment are also likely to soon grace the budget papers, with Austrac probing the company’s Sydney’s casino.

Star this week said its chief executive Matt Bekier would exit the board – but remain in the top job until a replacement is found.

A major NSW inquiry into Star heard allegations that almost $900m in gambling transactions were disguised as hotel bills. Star allegedly flouted money laundering controls and allowed triad-linked junkets to operating.