Crown cuts all junket partnerships
17 Nov 2020

Crown says it will stop dealing with any junket operators unless they are licensed, as unprecedented scrutiny of their use by three regulators puts pressure on the company’s casino licences and its share price.

The decision, which Crown announced to the ASX on Tuesday morning, builds on the company’s move in September to suspend all junket activity for the remainder of the financial year pending a review.

Junkets are a way to bring offshore high rollers to Crown’s Australian casinos but have come under pressure following media reports the practice was central to breaches of anti-money laundering laws at the company.

Crown said it would only restart relationships with junket operators if they received a tick of approval from state gaming regulators.

“The Board has determined that Crown will permanently cease dealing with all junket operators, subject to consultation with gaming regulators in Victoria, Western Australia and NSW,” the company said in a statement.

“Crown will only recommence dealing with a junket operator if that junket operator is licensed or otherwise approved or sanctioned by all gaming regulators in the states in which Crown operates.”

It has already begun consultations with regulators in the three states.

The NSW government’s independent inquiry into whether Crown should retain the licence for its soon-to-be-opened Sydney casino is wrapping up hearings, which have focussed heavily on risks associated with the company’s relationships with junket operators.

Counsel assisting the inquiry said Crown is “unsuitable” for the licence, owing to the “deleterious” influence of majority shareholder James Packer and substandard risk management that led to it entering into partnerships with junket operators linked to organised crime and breaching anti-money laundering laws.

The probe heard some of these operators had private gaming rooms, and that Crown discovered one junket partner had stashed $5.6 million of cash in a cupboard at Crown Melbourne. Crown legal officer Joshua Preston said this sent his “money-laundering alarms ringing”.

By Hannah Wootton and Lucas Baird, The Australian Financial Review, 17 November 2020

Read more at The Australian Financial Review

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