Junkets face ‘multiple criminal threats’: Austrac report

Organised VIP casino tours are being exploited by foreign agents and for terrorism funding and money laundering, Austrac says.

A croupier at a roulette table. Picture Chris Kidd

Casino junket operations face “multiple criminal threats” and high money-laundering and terrorism-financing risks, according to a report from the financial crimes watchdog.

The junket tour operations sector has been in the sights of Austrac in recent months amid an inquiry into the operations of Crown Resorts’ casino in Sydney.

Crown’s links to junkets — organised tours by gambling high-rollers — and admissions over money laundering are among factors that may threaten Crown’s NSW gaming licence.

Austrac’s report on junkets says: “A key vulnerability is the lack of transparency and level of anonymity created by the pooling of all players’ funds and transactions under the name of the [junket tour operator], and that the financial arrangements between the junket tour operators and junket players are not disclosed to the casino.

“There is a particular vulnerability associated with jurisdictions with currency flight and gambling restrictions in place as these measures create demand for covert money remittances which can be exploited by criminal groups.”

The Junket Tour Operations in Australia report notes that eight out of 13 casinos engaged in junket programs with more than 500 ­individual junket operators and representatives.

The financial crimes watchdog reported 635 suspicious matter reports, worth about $363.1m. Two casinos accounted for more than two-thirds of the reports. Potential money laundering was highlighted as a key threat in 47 per cent of suspicious matter reports.

The assessment comes after the Senate heard the agency knew about casino junket operator risks for years but was powerless to stop tainted funds from entering Australia.

Crown Resorts has put a ban on all junket operators unless they were approved or licensed in all states Crown operates in — NSW, Western Australia and Victoria.

Austrac in 2017 raised concerns about Crown’s junket partner the Macau-based Suncity, which it ­alleged had links with Macau ­organised crime.

But in August Star Entertainment told the NSW government inquiry it still worked with Suncity.

The Star said it continued to work closely with Austrac and other authorities to “assess risks and controls related to junkets”.

“We’ve received the Austrac report and are currently reviewing it,” a spokesman said.

Austrac found the use of offsetting arrangements, whereby money deposited offshore is made available to a player in Australia, was highly likely to be exploited in order to circumvent reporting obligations and launder proceeds of crime.

The report described observed patterns of behaviour that included people “withdrawing large amounts of cash and then immediately leaving the gaming floor, and junket staff providing cash to individuals who were not players on the junket”.

The report also found a small number of links between junket tour operators and possible foreign interference activities.

“Transactions indicate that entities who may be of concern from a foreign interference perspective could be using money held in casino accounts to make political donations with a link to foreign interference,” it said.

“Open source information indicates that a $100,000 cash withdrawal from a junket funded by an entity may have been donated to a NSW political party in a manner contrary to political donation laws.”

Austrac also reported that a person subject to a UN travel ban participated in a junket in Australia, during and subsequent to that ban.

“Austrac is aware that the junket tour operation with which the travel ban subject played was still operating in Australian casinos as at 2018,” it said.

“One partner agency assessed that it was likely that the subject of the ban was laundering the proceeds of crime as a junket participant in Australia.”

Austrac CEO Nicole Rose urged casinos to take prompt action to assess the risks posed by junket operations and to strengthen their reporting and controls.

“Money laundering and financial crime enables serious criminal activity such as drug trafficking and human trafficking which causes harm to our communities,” she said.

“Junkets are highly vulnerable to criminal misuse and Australian casinos must do more to mitigate (money laundering and terrorism financing) risks.”