The Australian Transaction Reports and Analysis Centre (AUSTRAC) recently told news reporters that they had widened their scope of the investigation. Australia’s anti-money-laundering agency plans to investigate possible breaches of the money-laundering laws by other top casinos too.

Furthermore, it appears the watchdog is widening their probe on Crown Resorts rivals Star Entertainment Group and SkyCity Entertainment Group. Most industry watchers believe that if these new investigations reveal any more offenses by the casinos, it would negatively affect the industry.

A few months ago, Crown Resort was indicted by an inquiry for not being fit to operate their newly opened casino resort in Sydney.

AUSTRAC Investigation: Possible Breach by Casinos

The searchlight by AUSTRAC was moved to Crown Resorts rivals Star Entertainment Group and SkyCity Entertainment Group. These casinos are believed to be under AUSTRAC investigation.

The AUSTRAC CEO Nicole Rose hinted this in her editorial published on Monday in The Australian newspaper. Rose had said that the Australian casino sector was at the risk of being used for criminal activities based on the product and services offered. A few hours after the publication, the agency confirmed the investigation of other casinos in Australia.

More so, Star Entertainment Group is alleged to have breached the customer diligence laws. Also, Star Entertainment is believed to have jeopardized over USD7 million meant to purchase Crown Resorts. Also, AUSTRAC discovered some compliance breaches at Star’s Sydney casino from 2015 to 2019. According to the agency, this triggered an enforcement investigation.

Caught up in the investigation is Sky’s Adelaide casino. The reason for Sky’s Adelaide casino is yet to be revealed by AUSTRAC.

The Possible Punishment for Any Australian Casino Found Wanting

The first punishment that may follow suit is the withdrawal of license from the guilty casino. Most likely, fines may follow depending on the weight of the offenses committed by the casino.

Although AUSTRAC has not proceeded with an enforcement action, the investigation may also stall the possible buyout of Crown Resort. Before the investigation commenced, Crown Resort had fielded USD6.9 billion.

According to some analysts, withdrawing the casino’s license doesn’t seem a likely punishment for a defaulting casino. According to Angus Hewitt, an analyst at Morningstar, the severest punishment may be fines and not license withdrawals.

Highlights of the Crown Resorts Inquiry That Led to the AUSTRAC Investigation

The panel that conducted the inquiry into Crown Resorts’ activities was chaired by Patricia Bergin, a former Supreme Court judge. The final report of the inquiry indicted Crown Resort as unfit to hold the license for the newly proposed Sydney Harbour Resort worth over USD 2.2 billion.

More so, it took 18-months before Patricia Bergin submitted the final report. The final report was contained in a 750-page document. Also, the report highlighted the involvement of Australia’s billion James Packer. Not to mention, James Packer also gave evidence during the hearing.

According to Bergin’s final report, the fact that James Packer had over 36 percent of the company’s shares meant that he exercised real power. The report added that such was disastrous for Crown Resort. Also, during the inquiry, Crown Resort authorities admitted that criminals might have laundered money in the Melbourne and Perth branches of the casino.

Effect of the AUSTRAC Investigation on the Australian Casino Market

Considering the major losses suffered by Australian casinos during the lockdown, this investigation possesses another major blow to the industry. For instance, Crown Resorts shares went down by 1.5 percent. Meanwhile, Star shares were also down by 3 percent. SkyCity shares did not trade because of the public holiday. Nonetheless, SkyCity shares are expected to be down too.

Also, most of the casinos for real money in Australia are yet to recover from the losses experienced because of the pandemic. Estimating, Australian casinos are believed to have lost more than $14 every day during the lockdown. The Australian casino industry was ranked as the fifth worst-hit casino industry globally, with over USD10.3 million in daily losses.

Aside from that, most of the staff of the Australian casinos lost their jobs. Now that this widened investigation is just starting, it will no doubt scare investors away. Therefore, the Australian casino sector is up with another round of losses. Whether or not the Australian casino market will come out of this bubbling remains unknown.

What’s the Way out for Australia’s Casino Industry?

It does appear that the investigation by AUSTRAC would take a while. Besides, an inquiry into Crown Resort took 18 months. Now that the authorities have widened their investigation, it may take longer.

Legalizing online casinos opt to be considered because, after the investigation, the land-based casinos in Australia may be in shambles. At least online casinos seem easier to manage and regulate. Besides, a lot of countries legalized online casinos despite their land-based casinos still functioning. For instance, Switzerland just legalized online casinos recently after a persistent downward revenue from the land-based casinos.