Crown Casino faces possible class action over AUSTRAC probe

By Tony Zhang|21 October 2020
Crown Casino

Casino giant Crown Resorts may face a class action after its share price dived sharply after it was found the company may have breached anti-money laundering laws.

A potential shareholder class action on Crown Resorts could be launched by Maurice Blackburn, after the share price fell 8.1 per cent on Monday when Crown Resorts disclosed AUSTRAC had identified potential non-compliance at Crown Melbourne with anti-money laundering and counter-terrorism financing laws.

Maurice Blackburn principal class actions lawyer Ben Slade said shareholders would expect Crown to have complied with laws designed to combat money laundering and anti-terrorism laws.

“Crown should have been well aware of the risks posed by money laundering in the casino industry, yet its risk management appears to have fallen short and the insidious practice looks like it continued in its casinos,” Mr Slade said.

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“On our analysis, this information is of grave concern to shareholders in Crown and warrants further investigation. It suggests that Crown’s compliance with anti-money laundering laws were so inept that it presented an unacceptable risk to shareholders.”

The matter has been referred to AUSTRAC’s enforcement team, which has begun a formal investigation into Crown Melbourne.

Crown said in a statement to the ASX that AUSTRAC had identified potential non-compliance with the laws including concerns in relation to ongoing customer due diligence, and adopting, maintaining and complying with an anti-money laundering/counterterrorism financing program.

Crown said the investigation was focused on Crown Melbourne’s management of customers identified as high risk and politically exposed persons, which is likely to include customers brought to the casino by junket operators in China.

Mr Slade said the object of the anti-money laundering laws is to promote public confidence in the Australian financial system by the disruption of money laundering. 

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Shareholders are entitled to rely on casinos to ensure rigorous compliance because casinos are obviously unmistakable targets for criminal activity, he added.

“Complying with anti-money laundering programs and making full disclosure is an important component of maintaining integrity in the financial system – it facilitates investors making properly informed decisions about how to allocate capital and where it is most deserving.”

The investigation follows an ongoing Maurice Blackburn class action against Crown Resorts Ltd on behalf of shareholders after the listed company’s share price fell dramatically on the back of revelations in October 2016 that 19 Crown employees were detained in China on suspicion of engaging in illegal marketing of its gambling services.

Crown Casino faces possible class action over AUSTRAC probe
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