Australian Judge Blasts AUSTRAC Over Crown Resorts Lawsuit

Posted on: February 15, 2023, 06:52h. 

Last updated on: May 30, 2023, 02:32h.

Australian casino operator Crown Resorts recently asked Australian Transaction Reports and Analysis Centre (AUSTRAC) for additional time to develop its defense, according to court documents. Now a federal judge has chided the financial watchdog over its continued foot-dragging in the lawsuit against Crown.

Crown Perth casino at sunset
Crown Resort’s Crown Perth casino at sunset. The casino operator is facing a lawsuit by Australia’s financial watchdog, which is accused of dragging its feet. (Image: Crown Resorts)

Federal judge Michael Lee publically criticized AUSTRAC over its prosecution of the Crown. He asked why the watchdog agreed to give the casino operator until May to mount a defense after already having a year.

He then labeled AUSTRAC’s decision “astounding,” comparing it to the resolution that ended the Napoleonic Wars.

The Congress of Vienna took nine months to talk about the future of Europe; you’ve had 12 months to talk about admissions,” Lee told AUSTRAC.

Lee ordered the Crown to file a response to the suit by February 27. After that, a hearing will be held on April 28, at which time it’s likely settlement negotiations will occur.

AUSTRAC said the Crown’s argument that it is building a defense against Australian AML laws warranted the extra time. It added that its officials weren’t experienced enough to counter Crown lawyers’ expertise.

Crown Resorts have previously admitted to money laundering and other violations in Victoria, New South Wales (NSW), and Western Australia. AUSTRAC launched a legal case against Crown for its financial failings over a year ago.

AUSTRAC is also currently investigating Star Entertainment and SkyCity Group for similar failures. They’re accused of widespread violations of Australian anti-money laundering (AML) laws.

Financial Update

Crown recently updated its financial health, showing an overall loss for its latest fiscal year. Crown Melbourne and Crown Sydney saw revenue of AU$923.8 million and AU$113 million (US$637.24 million and US$78.01 million), respectively.

Both properties saw significant year-on-year gains. However, Crown Perth lost ground, with revenue of AU$731.7 million (US$505.16 million).

Crown’s overall bottom line was a loss of AU$945.4 million (US$632.18 million), because of the problems it has faced lately.

Ongoing Suit

Queensland and NSW already determined that Crown and Star, by their own admission, failed to comply with AML laws for years. In addition, they violated responsible gambling procedures by not conducting risk assessments of multiple customers. These left billions of dollars on the casino floors, which Crown was happy to collect without batting an eye.

AUSTRAC launched its suit against Crown last March. That’s when state-level inquiries into the operators were concluding. At the time, it claimed there were at least 576 violations. These could each carry a financial penalty of around AU$22.2 million (US$15.32 million), according to Australian law.

However, it’s unlikely the Crown would have to pay AUSTRAC more than a billion dollars. Six years ago, gaming operator Tabcorp faced a penalty of AU$702 million (US$484.66 million) but only had to pay AU$45 million (US$31.06 million).