As seen in the October Edition of QHA Review.
You may have seen the investigation by Nine’s The Sydney Morning Herald, The Age and 60 Minutes in July 2019, which alleged that Australia’s biggest casino giant, Crown Casino, turned a “blind eye” to money laundering, gaming machine tampering and exploitation of Australia’s visa system.
Given the flood of claims made against Crown, a series of inquiries were launched to address the risk of money laundering in casinos, and investigate Crown’s alleged links to organised crime. In defence of the claims, Crown said it has a “comprehensive anti-money laundering and counter-terrorism financing program” which is subject to regulatory supervision by The Australian Transaction Reports and Analysis Centre (AUSTRAC). In late 2018, an external anti-money laundering (AML) auditor, authorised by AUSTRAC, was engaged to review Crown’s monitoring programs. On 21 August 2019, Crown’s executive chairman told Financial Review that the independent auditor has allegedly certified Crown as “completely compliant”.
And so, the Crown scandal continues. Yet, regardless of whether the allegations are found to be true, it is difficult to ignore the significant reputational and economic impact this scandal has had on Crown Resorts, with recent headlines such as “full year profit falls 4.7%” and “share prices fall by almost 10% in just three months”.
While Crown may be considered a ‘giant’ in the hospitality industry, the scandal serves as a reminder of the risk all hotels and gaming licensees face of money laundering in their venue. Of course, subject to the findings of these inquiries, a broad-scale crackdown on money laundering in the hospitality industry may not be out of the question, along with stricter measures being imposed on licensees generally.
In the meantime, however, all hotels with gaming machines should be aware of their Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) reporting obligations and the requirement for them to have a compliant AML/CTF plan.
Accordingly, AUSTRAC has developed the following tips for hotels in protecting themselves against money laundering:
- Hotels need to ensure that they are not taking a ‘one-size fits all’ approach to identifying and managing money laundering risks. Rather, each hotel should have a specific AML/CTF program in place which is tailored specifically to the hotel.
- It is important for hotels to realise that money laundering can still occur when a patron plays all of the money they deposit. Criminals are increasingly willing to lose a percentage of their deposit as a cost of money laundering. Venues cannot rely on the fact that a patron is playing the gaming machines as evidence that money laundering is not occurring in their venue. Therefore, it is critical that hotels have a transaction monitoring program that can address this type of money laundering. Through analysing the data collected by this program, hotels should be reporting customers who receive a high number of gaming payouts over a specific period.
- Hotels should note that money launderers are often regular customers. While it is important to build strong relationships with customers, Licensees should be constantly monitoring their hotel for suspicious activity. AUSTRAC has advised that this can include customers who are buying winning tickets/cheques, asking for cheques to be written in someone else’s name and regularly bringing very large amounts of cash to gamble.
- Hotels have specific record keeping obligations under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006. It is critical for hotels to maintain accurate records of transactions. AUSTRAC recommends that these records are kept electronically, making monitoring transactions under your monitoring program easier.
It is vital that hotels take their AML/CTF responsibilities seriously to avoid hefty fines and other potential consequences. You need only look at the Crown scandal to understand the importance of reporting any suspicious matters and having a compliant AML/CTF program in place.
Do you need assistance with tailoring a compliant program? Give me a call on 07 3224 0230 to protect your venue from the risks of money laundering.