While top online NZ Casinos don't face the issue of money laundering on their grounds, the same cannot be said for their land based counterparts. Recently, we reported on AUSTRAC penalising SkyCity Entertainment for this. This week, Queensland has imposed a fine of A$100 million on Star Entertainment for repeatedly violating gambling and anti-money laundering laws. The Australian state recently completed an investigation of Star and is determined to teach the operator a lesson.
One may recall that New South Wales (NSW) recently imposed a fine of A$100 million on the operator. Investigation reveals that Star Entertainment and Crown Resorts boosted their profits by supporting the money laundering activities of notorious criminals who break international laws. The Australian media exposed both operators and triggered a series of government inquiries, which continue today all over Australia and New Zealand.
ABC News reports that Star has to pay Queensland a fine of A$100 million for breaking anti-money laundering laws for several years. Star will lose the license it needs to operate Treasury Brisbane and Star Gold Coast for 90 days.
But Queensland has kept the 90-day suspension on hold for 12 months to give the operator a chance to clean up its operations. The Australian state will not enforce the suspension if the operator proves its ability to comply with the laws within 12 months. On the other hand, the operator will have to shut down its casinos if Queensland finds it guilty of fresh violations.
Moreover, Star is building a new resort called Queen's Wharf, a project worth A$3.6 billion, and Queensland's crackdown on the operator may impact this mammoth project significantly.
Queensland will also appoint an independent monitor to oversee Star’s operations and prevent further violation of laws.
NSW did something similar when it cracked down on the operator within its jurisdiction. The NSW Independent Casino Commission (NICC) appointed Nicholas Weeks, an independent administrator, to monitor the operations of Star Sydney.
Weeks will also monitor the operator's activities in Queensland. Terri Hamilton, an anti-money laundering and risk management expert, will assist him in this task.
Star attempted to appoint a supervisor of its own in NSW, but the NICC objected to this move. Also, the NICC made Star bear the monitor's expenses.
Queensland and NSW are not the only states to crack down on Star. Australia's financial regulator, the Australian Transaction Reporting and Analysis Centre (AUSTRAC), also investigated the operator and is preparing to drag the company and one of its CEOs to court.
Multiple inquiries reveal that Star and Crown have directly and indirectly permitted money laundering in their casinos. The two companies allowed Chinese gamblers to use China UnionPay cards despite being aware that they were violating Chinese laws. The operators dodged Chinese gambling laws by fabricating hotel stay bills to disguise the money their Chinese customers spent on the gambling floors.
Meanwhile, SkyCity Entertainment Group, an operator based in New Zealand, is also in trouble with regulators. The company may have to pay fines of several million NZD for violating anti-money laundering and safe gambling laws.
Many anti-gambling groups feel that the steps taken against Star and Crown are inadequate. For example, Tim Costello, the anti-gambling evangelist, says that the government must shut down the casinos for public good.
But governments cannot shut down casinos because they generate significant tax revenues for the state. Shutting them down will create problems in how government bodies function instead of teaching a lesson to the operators.