Junket Operations Rife With ‘Multiple Criminal Threats’: AUSTRAC Warns

December 11, 2020 Updated: December 11, 2020

Australia’s financial industry crime watchdog has warned the gambling junket tour sector is exposed to “multiple criminal threats” with the risk of money laundering and terrorism financing (ML/TF) being “high.”

The Australian Transaction Reports and Analysis Centre (AUSTRAC) has released a risk assessment for casinos to assess any potential suspicious activity around junket tour operations (JTO) and to put in proper safeguards.

“Money laundering and financial crime enables serious criminal activity such as drug trafficking and human trafficking which causes harm to our communities,” Nicole Rose, CEO of AUSTRAC, said in a statement.

“The information contained in this risk assessment shows that junkets are highly vulnerable to criminal misuse and Australian casinos must do more to mitigate money laundering and terrorism financing risks,” she said.

“I urge casinos to take prompt action by assessing their levels of risk posed by junket operations, strengthening their controls, and reporting suspicious activity to AUSTRAC,” she said.

Junkets are arrangements between a casino and a JTO to facilitate a period of gambling by one or more of players at a casino. In return for bringing the players to the casino, the casino pays the JTO a commission based on the collective gambling activity of players on the junket.

AUSTRAC has recently launched an enforcement investigation into Crown Resorts after identifying possible money laundering activities.

The group has faced tough questions during an inquiry by the New South Wales Independent Liquor and Gaming Authority over whether it is suitable to hold a gaming license at its new Crown Sydney resort in Barangaroo.

The “Crown Inquiry” has highlighted a litany of issues surrounding high-roller Asian gambling junkets and management of the company. Junket operators have alleged links to organised crime syndicates, according to a report by 60 Minutes last year.

Rob Nicholls, associate professor at the University of New South Wales, said it was only a “matter of time” before AUSTRAC concluded the high risks of ML/TF activity with junket tours.

“Australian casinos have built a business model that assumes the use of JTO,” he told The Epoch Times.

“Casinos have an obligation to assist in the detection and reporting of money laundering. This flows from their licences, and if a casino does not manage the criminal exploitation risk, it may lose its licence,” he said.

Nicholls believes Crown’s chances of being granted a gaming license are low, given the issues that have emerged from the most recent inquiry.