Findings of AUSTRAC casino junket report were wrong
Friday 4th December 2020
A version of the report released under Freedom of Information redacted any reference to the vulnerabilities in casino AML/CTF programs, leaving only information about broad awareness and compliance across the sector.
But the full report, released after the Senate ordered production of the document, revealed a very different picture.
It found casinos were using legal technicalities through which junket tour operators (JTOs), not the individual gamblers, were treated as the casino "customer" for the purpose of AML/CTF laws.
"From the casino's perspective, all the front money comes from the JTO and all the winnings go to the JTO," a now-unredacted section of report said.
"This means that all reporting on these transactions occurs only under the JTO's name and not the financial activity of the individual participants. This is a significant vulnerability for junket operations.
"While there was a theoretical acceptance that junkets may be exploited, it was AUSTRAC's view that this possibility was not taken seriously."
Junket operators have long been paid to bring mainly Asian VIP (very important player) gamblers to Australian casinos, and are generally responsible for all aspects of a player's visit to a casino.
AUSTRAC launched an investigation at casino giant Crown Resorts in 2019 over concerns Chinese VIP junket operators with links to organised crime were using its casinos for money laundering and other criminal activities.
On Friday Ms Rose said she was "very concerned" about Crown's level of compliance with AML/CTF laws.
Part of the issue for the regulator, she said, is that individual casinos are responsible for AML/CTF compliance and the overseas nature of junket operators makes compliance activities difficult.
Labor Senator Louise Pratt asked Ms Rose where it was accurate that AUSTRAC had been looking at this issue since the report in 2017 but still hadn't identified any solutions.
"Correct," Ms Rose responded. "We believe there are a range of barriers to AUSTRAC being able to manage that effectively on its own."