Crown Resorts has admitted to money laundering and other breaches in the states of Victoria, New South Wales (NSW) and Western Australia. As a result, a federal judge in Australia has lashed out at the Australian Transaction Reports and Analysis Center (AUSTRAC) for continuing delays in its lawsuit against the casino operator.

 

It has been more than a year since AUSTRAC launched legal action over Crown's financial blunders. The country's financial watchdog is also pursuing similar failures at Star Entertainment and SkyCity Group, alleging widespread breaches of Australia's anti-money laundering (AML) laws.

 

However, according to court documents, Crown recently asked AUSTRAC to give it more time to develop the defense. The entity agreed, leading federal Judge Michael Lee to lash out at it.

 

Comparing Crown Collapse to Napoleonic Wars

Lee accused AUSTRAC of failing to take the prosecution of Crown and others seriously. That was the only explanation he could come up with for why regulators would agree to give casino operators until May to make their case. It's been a year now, except that the crown faces inquiries from various states.

 

Judges called AUSTRAC's decision "appalling" and compared it to the resolution that ended the Napoleonic Wars. Directly to entities, he said, “The Vienna Conference spent nine months discussing the future of Europe; you have 12 months discussing admissions.”

 

Queensland and New South Wales have identified Crown and Star, which by their own admission, failed to comply with anti-money laundering laws over the years. Additionally, they failed to conduct a risk assessment of multiple clients, in breach of responsible gambling procedures. These leave billions of dollars on the casino floor that Crown is more than happy to collect without blinking an eye.

 

AUSTRAC launched proceedings against Crown in March last year, following the conclusion of the state-level investigation. At the time, it said there had been at least 576 breaches, each carrying a fine of about 22.2 million Australian dollars ($15.32 million) under Australian law.

 

It is unlikely that Crown will have to pay AUSTRAC more than $1 billion. However, it is reasonable to expect a payout of several hundred million dollars once the litigation is concluded or through a settlement. Six years ago, gaming operator Tabcorp faced a A$702 million (US$484.66 million) fine but only had to pay A$45 million (US$31.06 million).

 

clock ticking

AUSTRAC attempted to explain to Lee that it had no choice but to agree to an extension. It said Crown claimed it was building defenses against Australian anti-money laundering laws, so the extra time was needed. It added that the experience of its officers was insufficient to counter the expertise of Crown lawyers.

 

Li was reluctant to take the matter to court unless absolutely necessary. He gave Crown until February 27 to respond to the lawsuit. After that, a hearing will be held on April 28, at which point settlement talks may begin.

 

Crown recently updated its financials, showing an overall loss for its latest financial year. Crown Melbourne and Sydney recorded revenues of AU$923.8 million and AU$113 million ($637.24 million and $78.01 million, respectively).

 

Both properties recorded significant year-over-year growth. However, Crown Perth lost ground, with revenue of A$731.7 million ($505.16 million). Overall, Crown's bottom line was a loss of A$945.4 million ($632.18 million) due to the problems it has faced recently.