AUSTRALIAN CASINO REGULATION
However, there is a key difference between the proceedings brought by AUSTRAC against the Crown Group and The Star; AUSTRAC has also claimed that The Star intentionally mislead National Australia Bank in connection with its compliance with AML/CTF obligations. ASIC: On 12 December 2022, ASIC commenced civil penalty proceedings in the Federal Court of Australia against 11 current and former directors and officers of The Star for alleged breaches of their duties under Section 180 of the Corporations Act 2001 (Cth) (Corporations Act). These proceedings are current; in these proceedings, ASIC claims that each of the directors and officers of The Star failed to exercise the degree of care and diligence a reasonable person in their position would have exercised in the corporation’s circumstances. In summary, ASIC alleges that: • the relevant directors: • approved the expansion of The Star’s relationship with certain individuals with reported criminal links, rather than addressing money laundering risks by inquiring into whether The Star should be dealing with them; • when provided with information about money laundering risks affecting The Star, did not take steps to make further enquiries of management about those critical risks (which is a breach of director duty obligations under the Corporations Act);
Federal Court to have breached the Corporations Act: • a maximum penalty of AU$1.05 million for each breach may be imposed against the relevant director and/or officer; and • the directors and/or officers can be disqualified from holding any current or future directorships. In light of the various disciplinary action, and enforcement action, taken against the Crown Group and The Star group, Australian regulators have taken broader enforcement action in relation to Australian casinos, in particular: • Reef Casino: The QOLGR fined Casinos Austria an amount of AU$10,000 for a breach of Queensland casino legislation - the QOLGR concluded that a junket arrangement involving the Reef Casino breached Queensland casino legislation as the Reef Casino had not received written approval from the Queensland Gaming Minister to enter that arrangement. • The Ville Resort Casino: The QOLGR brought proceedings in the Federal Court of Australia against Breakwater for alleged breaches of Queensland casino legislation, namely: • paying a junket operator in “cash and loyalty points”; and • operating a junket agreement that was not approved by the Queensland Gaming Minister. The proceedings are current, with a possible outcome that substantial fines will be imposed on Breakwater. • SkyCity Adelaide casino: AUSTRAC commenced civil penalty proceedings in the Federal Court of Australia against SkyCity Adelaide for breaches of the AML/CTF Act. In a manner similar to the AUSTRAC proceedings against the Crown Group and The Star, AUSTRAC claims in these proceedings that there have been various contraventions of the AML/CTF Act by SkyCity Adelaide, namely: • Breaches of Section 36(1) of the AML/CTF Act (which relate to ongoing customer due diligence); and • Breaches of Section 81 of the AML/CTF Act (which relate to the adoption and maintenance of an AML/ CTF program). The proceedings are current, and it is likely that the outcome
•
the relevant directors and officers: •
did not adequately address the money laundering risks that arose from dealing with Asian gambling junket Suncity and its founder, and, additionally, continued to deal with them despite becoming aware of reports of criminal links; and • did not appropriately escalate money laundering issues to the Board of Directors; and • the relevant officers knowingly permitted the submission of misleading statements to National Australia Bank (NAB) regarding the use of China Union Pay cards at NAB ATMs on The Star’s premises. If the relevant directors and/or officers are found by the
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IMGL MAGAZINE | JANUARY 2023
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