AUSTRAC: Casinos and not Regulators Should Control Junkets

Things will get tough for all casino operators in Australia in the wake of the scandal caused by the activities of Crown Resorts. The discussion is focused on how gambling operators should manage their activity from now on.

The Australian Transaction Analysis and Reporting Center (AUSTRAC) has issued some guidelines until new regulations are implemented. Due to the open investigation against Crown for facilitating massive money laundering, the government and regulators are more focused on observing casino activity.

During a recent Senate hearing, AUSTRAC CEO Nicole Rose said that casino operators must manage every activity related to their operations, including junkets.

At the hearing, Rose argued that “AUSTRAC does not regulate tour operators. Industry has a responsibility to ensure that it meets its AML / CTF obligations. The Federal Court has also reiterated this opinion”.

When asked about possible loopholes in special markets regulations, she said that “national regulation will not address the problems” and added that “the industry was well placed to manage and assess its own risks.”

For AUSTRAC, casino operators have been very lax in their supervision of junkets. Perhaps because a large volume of money that enters the properties each year depends on them.

A report by the control body published three years ago determined that the flexibility of the operators in the face of certain activities at odds with the law. It also established that they were not managing a strict control of the companies to ensure that they actually met Australian financial standards.

“This means that all the reports on these transactions are produced only under the name of the tour operator of the trip and not under the financial activity of the individual participants,” said the watchdog.

And it added:

“This is a major vulnerability for junket operations. Although there was a theoretical acceptance that junkets can be exploited, AUSTRAC was of the opinion that this possibility was not taken seriously”.

With the worst of the Crown coming out into the open the regulators’ eye is sharper. Junkets are a legitimate business and serve a certain purpose, the question is why casino operators are obliged to keep them online.

Meanwhile, Crown’s future is uncertain after its license has been deemed “inadequate.” It appears that the Crown scandal will have far more consequences for the entire Australian gaming industry.


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