Australia’s anti-money laundering agency has warned Crown Resorts, Star Entertainment Group, and SkyCity Entertainment about “potential serious non-compliance.”
After identifying potential non-compliance with the Australian Anti-Money Laundering and Counter-Terrorism Financing Act 2006 and the Anti-Money Laundering and Counter-Terrorism Financing Rules Instrument 2007, the Australian Transaction Reports and Analysis Centre wrote to each of the casino operators.
Fines are the most likely conclusion of the current investigations, according to local media sites, and it’s unclear what obstacles this will add to the Star’s ongoing merger aspirations with its under pressure rival Crown Resorts.
Following a New South Wales Independent Liquor and Gaming Authority examination, which found poor corporate governance, insufficient risk-management structures and processes, and a bad corporate culture, the group was declared ineligible to run the $2.2 billion Crown Sydney Hotel Resort.
As a result, investigations have been begun in the Australian states of Victoria and Western Australia, where the organisation also operates.
High risk and politically exposed
The management of consumers “identified as high risk and politically exposed” is stated to be a focus of the AUSTRAC enforcement activities, which include Crown Perth, SkyCity Adelaide, and The Star Sydney.
Each of the parties involved points out that AUSTRAC has stated that it has not made a judgement on the appropriate regulatory reaction to take, and that they will “completely assist with any inquiries.”
Crown Resorts unanimously rejected a takeover offer from Blackstone Group last month, calling the bid undervalued and “not in the best interests” of its shareholders.
This appeared to give Star Entertainment Group the upper hand, since the company was asked to supply “certain information to allow the Crown board to better understand various preliminary matters” after submitting a merger proposal earlier this month.
Star estimates that combining the two firms will result in annual cost synergies of $150 million to $200 million, with a net value of $2 billion.