Crown Resorts has been banned from opening its new Sydney casino next month, after NSW’s gambling regulator said it was “not comfortable” with the company operating the multibillion-dollar venue at Barangaroo.
The decision by the NSW Independent Liquor and Gaming Authority comes after the company admitted on Wednesday in an inquiry that money laundering had likely occurred through accounts it set up for its VIP players.
ILGA chairman Philip Crawford said the authority was “not comfortable” with Crown operating gaming operations until it received the findings from the ongoing inquiry, before Commissioner Patricia Bergin, SC.
Commissioner Bergin is examining Crown’s fitness to hold the licence, and her final report is not due until February 2021.
Mr Crawford said the ILGA’s biggest concern was around money laundering, which Crown admitted was “likely” happening in its business in a submission tendered to the inquiry late on Tuesday.
“We had no notice that was being done, I don’t think the Bergin inquiry or counsel assisting were aware of it and it’s come at the eleventh hour, literally – apparently 11 o’clock last night,” he said.
It was Crown Resorts’ first admission to the ILGA that money-laundering was “likely” occurring through the accounts it sets up for its VIP players.
The ILGA has been examining evidence concerning suspicious activity within the accounts set up by Crown since January.
The operation saw millions of dollars deposited for high-rollers to play at Crown’s casinos in Melbourne and Perth.
The accounts were operated by two companies controlled by Crown known as Riverbank and Southbank.
Crown’s lawyers submitted the company’s response to the money laundering claims at 11pm on Tuesday, just days before the inquiry’s conclusion.
The ILGA is assessing whether Crown is fit to hold the licence for the soon-to-be-opened casino at Barangaroo.
Crown barrister Robert Craig SC said the company accepted the suggestion that a form of money laundering known as “cuckoo smurfing” was likely occurring, whereby large transactions are broken down into smaller deposits to avoid detection.
“Cuckoo smurfing is a sophisticated money laundering typology whereby innocent parties make and receive legitimate payments that illicit funds are inserted into the process of making those legitimate payments,” he said.
“Crown accepts that an inference can be drawn that in some point in time, deposits into the Riverbank and Southbank accounts were more probably than not part of cuckoo smurfing activity.”
He said a report by a third party that reviewed the transactions was not able to prove any particular transactions that could be illegal.
“The evidence does not allow though, that that standard, or more importantly, beyond reasonable doubt, the identification of any particular instances or transactions in which money-laundering occurred,” he said.
The hearing has previously been told Crown’s board was unaware of the suspicious activity, which was flagged by the banks and later raised with senior staff.
Commissioner Patricia Bergin, who is presiding over the inquiry, quizzed Mr Craig why the submission was received late on Tuesday.
She also asked him to clarify if the company plainly accepted money laundering was regularly occurring.
“What are you saying Mr Craig, really, it’s either indicative of money laundering or it isn’t?”
Mr Craig responded, saying the company rejected the premise it could identify precise instances of laundering.
“What I’m saying is, an inference can be drawn from this report that in some point in time deposits into those accounts were more probably than not cuckoo smurfing activity, a form of money laundering,” he said.
“What can’t be done, based on this analysis, is an identification on whether any particular instance of a transaction is or is not money-laundering.
“One needs to be careful of the standard of proof one is applying as well.”
Commissioner Bergin is expected to recommend whether to remove Crown’s licence completely, or impose sweeping recommendations to enhance the scrutiny over the gaming giant in February.