What we are hearing – February 2021

Following an 18 month public inquiry by the NSW Independent Liquor & Gaming Authority (ILGA) into the suitability to hold a gaming license at the $2.2 billion newly constructed site at Barangaroo, an investigation has begun on Crown Resorts following ongoing allegations that the casino facilitated large scale money laundering activities.

The inquiry led by Patricia Bergin SC involved a review of 80,000 documents with 187 summonses to appear in over 60 public hearing days and resulted in a comprehensive 750 page report covering two main parts:  Part A, comprised a “Suitability Review” into whether Crown remains suitable to hold a restricted gaming license and Part B, focused on Crown’s “Regulatory Framework and Settings”, essentially assessing the organisations ability to manage the risks around its complex casino operations.

The report concluded that Crown Resorts were “not suitable” to hold a license and strongly criticised its corporate culture, governance and risk management practices and called for wide-reaching reforms to be made.

Immediately following the report the media were quick to turn up the heat in criticising Crown culminating in a 5 Board Directors, including the CEO, Ken Barton to resign, but in an interview the NSW Independent Liquor & Gaming Authority (ILGA) Chair Phillip Crawford, commented that he felt that Crown still need to make further changes to its Board.

There is clearly a mountain to climb with the Acting CEO and Board Chair Helen Coonan and the remaining Board now expected to have to answer inquiries from other gaming authorities in Western Australia and Victoria in respect of Crown’s Perth and Melbourne operations, which could complicate it’s chances of obtaining a license in Sydney, in the near future.  Added to these woes, there is mounting pressure from institutional investors and ratings agencies calling for strong actions to be taken to remediate the deficiencies identified in the inquiry.

The strong blowback against Crown highlights the importance of managing financial crime risks and the consequences of not having robust and effective controls in place to manage risks and is a strong reminder to other regulated entities, particularly those in the higher risk gaming and wagering sectors to manage their money laundering and terrorism financing risk exposures.

This is also a timely reminder to all 14,000 Australian reporting entities that must submit their annual compliance report to AUSTRAC by the end of next month to take the time to review your organisations money laundering and terrorism financing risk assessment and review and refresh your AML/CTF Program.

Our team at Arctic Intelligence are helping hundreds of businesses with this.  Last month we launched a major upgrade of our enterprise-wide risk assessment platform and recently we launched several important enhancements to our market-leading AML Accelerate platform, including a compliance calendar to help regulated entities track, manage and report actions they have committed to take to improve their AML/CTF Programs. If you would like to find out how our solutions can help you identify, assess and understand your risks and implement effective controls please get in touch with us.

Thanks

Anthony Quinn

Title: Founder + Executive Director

Connect: LinkedIn

Follow us on LinkedIn and Twitter for a daily dose of financial crime news across the globe.

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