After years of justified opprobrium, suddenly powerful people are lavishing kindness on two of the worst perpetrators in Australia’s rotten, corrupt gambling industry.
In NSW, the new Labor government is looking at reducing the tax levied on the disgraced Star casino by then-treasurer Matt Kean under the former Liberal government. And in Melbourne the financial intelligence agency AUSTRAC is trying to convince the Federal Court to allow it to go easy on Crown casino.
Both are interesting, especially to those who wonder how, even after everything we’ve learnt about the sordid behaviour of Star and Crown, anyone could possibly think giving these companies a break is a good idea.
Back on May 30, AUSTRAC announced its long-awaited penalty for Crown’s serious and systemic breaches of anti-money laundering laws — a fine of $450 million. The fine was the result of a deal with Crown, which joined AUSTRAC in a joint submission to the Federal Court.
Problem was, Justice Michael Lee was waiting with a baseball bat for the parties this week. The $450 million figure was rubbish, he said — it was more like $406 million plus interest. Under the typical Federal Court approach, $450 million would mean $450 million, he said, with interest on top. And Crown wasn’t going to pay the fine all at once, but make staggered payments across two years in its deal — without interest.
Crown told Lee he shouldn’t interfere in the deal it had thrashed out with AUSTRAC: having to pay the agreed amount over one year would strain the company’s finances and force it to approach lenders for further funds.
Yesterday, as The Australian Financial Review’s Hannah Wootton reported, Lee said Crown hadn’t produced any evidence to back up its claim that the bailiffs would be knocking on the door if they had to pay the fine all at once. He approved the deal, but on the basis that if Crown’s cash position improved, it would pay the fine faster.
Lee also lectured the regulator about serving what he suggested was a relatively modest fine — given the level of lawbreaking — that created the risk that companies might conclude it was worth breaking the law, especially given AUSTRAC seemed to be reluctant to take matters to court rather than thrash out a deal.
It’s deeply embarrassing for AUSTRAC, which in May was pretending to be the tough cop on the beat, calling Crown’s breaches “a range of obviously high-risk practices, behaviours and customer relationships [that] were allowed to continue unchecked for many years”. The deal it negotiated with Crown hardly matches that rhetoric. Why AUSTRAC didn’t go harder by taking the perpetrator to court isn’t clear. Nor is it clear why the details of the amount were fudged in the May media statement.
Meanwhile in June, the Minns government in NSW delayed until August the implementation of an increased tax on Star levied by the Perrottet government amid revelations of widespread misconduct at the Sydney casino, which forced most of the executive and board out. The tax would have been worth more than $360 million over three years to NSW.
NSW Labor’s justification was that Star hadn’t been consulted on how much tax it should pay, and that jobs might be at risk. Presumably Minns and his Treasurer Daniel Mookhey are also about to commence an extended consultation with homebuyers about how much stamp duty they think they can pay, and liaise with businesses about how much payroll tax they think they can pay before jobs are put at risk?
NSW Labor’s delaying and likely watering down of the Star tax is part of a long pattern of it looking after gambling interests, including those of Labor-linked clubs that rely heavily on gambling revenue. Its much-vaunted, and wholly unnecessary, trial of cashless poker machines, supposed to start this month, has also — you guessed it — been delayed.
Star was also taken to the Federal Court by AUSTRAC for its systemic and serious money-laundering breaches late last year. Investors might be hoping the spirit of generosity on display to Crown finds expression in AUSTRAC’s treatment of Star.
The rich irony of course is that, in pleading that they can’t pay, Star and Crown are demanding the kind of treatment they never gave to problem gamblers, who they were happy to bleed dry while toothless regulators stood by, back before major inquiries and royal commissions exposed their egregious misconduct. Egregious misconduct that AUSTRAC appears to think warrants special deals, not litigation.
