Australia’s anti-money-laundering agency said it was investigating casino operator Star Entertainment Group over suspected breaches of customer due diligence laws, jeopardizing a A$9 billion (US$7 billion) proposal to buy rival Crown Resorts, Reuters reports.
The Australian Transaction Reports and Analysis Centre (AUSTRAC) disclosed the Star inquiry on Monday among a flurry of new investigations, including a widening of an existing inquiry into Crown, which has been fielding takeover approaches as a way to resolve allegations of systemic governance failings.
An investigation into Star, owner of Sydney’s only casino, over similar issues would most likely heighten the challenge of getting regulatory clearance for the company’s audacious buyout approach for Crown last month.
With AUSTRAC widening its Crown inquiry to include its Perth resort and a separate investigation into an Adelaide casino owned by New Zealand’s Sky Entertainment Group, owners of the main casinos in Australia’s five biggest cities are under formal investigation.
AUSTRAC found potential compliance breaches at Star’s Sydney casino during an assessment of its handling of “high risk and politically exposed” customers from 2015 to 2019, triggering an “enforcement investigation,” Star said in a market filing.
The agency had not decided what action to take but had “indicated that it will request information and documents from The Star as part of its investigation,” Star added, noting that it would fully cooperate.
AUSTRAC confirmed the investigations, which it said were the result of “proactive regulatory work in the casino sector” but declined to comment further.
Shares of Star were down by 2 percent and of Crown were down by 1 percent in morning trading, against a flat overall market.
SkyCity’s New Zealand-listed shares did not trade because of a public holiday.
For Crown, the investigations into its Perth complex and Star build on an already sizeable headache: its Sydney gambling licence was suspended just before the company planned to open a A$2.2 billion (US$1.7 billion) resort there in December over claims at a separate regulatory inquiry about company dealings with organised crime.
In addition to the AUSTRAC scrutiny, Crown is navigating two subsequent regulator inquiries into its operations in Melbourne and Perth, two class-action lawsuits, several takeover proposals, and rolling restrictions on trading related to lockdowns.
In a separate development on Monday, Crown said it had received legal advice that it had contravened casino laws by selling over A$160 million of gambling chips to people paying with credit or debit cards from 2012 to 2016 – potentially sparking yet another investigation.