Posted on: March 1, 2022, 05:43h.
Last updated on: March 1, 2022, 05:43h.
Crown Resorts continues to pay for its inability to follow Australia’s gaming and financial rules. The casino operator received a letter from AUSTRAC that it faces civil penalty proceedings over its missteps.
The Australian Transaction Reports and Analysis Centre (AUSTRAC), the country’s financial watchdog, announced today that it is ready to formally go after Crown Resorts. New South Wales, Victoria and Western Australia all found the company negligent in its regulatory oversight and AUSTRAC feels the same. It accuses Crown of “systemic non-compliance” of anti-money laundering and counter-terrorism financing (AML/CTF) laws in the country.
Crown Continues to Pay for its Past
As a result, AUSTRAC is launching civil penalty proceedings in federal court against both Crown Melbourne and Crown Perth. The regulator doesn’t specify a particular level of punitive damages in association with its case, explaining that this will be up to the court to decide.
AUSTRAC has taken this strong action to achieve enduring change and ensure that Crown will fully meet their obligations to protect themselves and Australia’s financial system from criminal activity,” said AUSTRAC CEO Nicole Rose.
The regulator’s decision to take Crown to court was based largely on the results of the investigations by Australian states. These determined that there was a lack of proper governance in the company, as well as an inherent inability to maintain compliance with established AML/ATF laws.
Crown also neglected to provide oversight of its customer due diligence requirements. It allowed certain VIP and high-risk customers to fly over or under the radar, depending on what served the company the best.
Star Entertainment should start preparing itself now for possible retaliation. Initial investigations in Australia determined that the Crown rival may have also succumbed to the same misguided managerial modus operandi. AUSTRAC warned in its Crown announcement that it is now ready to focus its efforts on the company.
Analysts Concerned Over Blackstone’s Crown Deal
Later this year, Crown shareholders are likely to approve a deal by The Blackstone Group to purchase the company. While the arrangement looks good on paper, at $6.5 billion, one analysis firm thinks it may not hold value in the long run.
Fitch Ratings provided an update this week, asserting that a downgrade of the company is likely. It will depend on how Blackstone manages the company after the acquisition. The company could wind up as either a low “BB” or a high “B,” with the possibility of a greater drop being seen. Currently, Crown is a BBB, according to Fitch.
The predicted change comes from expectations of how Blackstone will manage Crown following the acquisition. Fitch believes the company will be very aggressive and could split operations. This is something that has previously been put on the table.
Any change depends on a number of factors. First, shareholders have to approve the deal. Next, regulators have to sign off on it, as well as any subsequent operational splits Blackstone may submit. All of that is contingent upon Crown still having something to offer. Gaming and financial regulators continue to hit it in its wallet.