Australia’s second largest casino operator has decided to cease working with international junket operators.

Inside Asian Gaming reports that Star Entertainment Group reached an agreement with the NSW Independent Liquor and Gaming Authority to cease its relationship with junket operators.

In an update provided by ILGA chair Philip Crawford, where he discussed Crown’s progress in overturning its unsuitability to run its Barangaroo casino, it was revealed Star had reached an agreement that would see it no longer work with international junket operators.

New South Wales becomes the second Australian state to implement a junket ban after the Gaming and Wagering Commission of Western Australia, which oversees Crown Perth, outlined similar plans in February.

New Zealand’s SkyCity Entertainment Group announced in April that it would permanently cease all dealings with junket operators and bring its international VIP operations in-house, following a strategic review into the company’s International Business division.

Asked Thursday about how the absence of junkets might impact the feasibility of Crown’s AU$2.2 billion Crown Sydney development, which has been billed as a “high rollers casino” Crawford said, “My understand from Helen Coonan is that they’ve scrapped their VIP program completely and how they’re going to survive without international guests, that’s a business plan issue that is not my purview.

“Their restaurants and bars are open and people tell me they’re booming but they’ve got their own business model, they’re doing their own numbers and they’ll have to assess that as they’re going forward.

“My understanding is that the VIP program Crown had is gone.”

Junkets a thing of the past for SkyCity

SkyCity said it has determined to permanently cease dealing with all junket operators and will instead operate its International Business under a revised operating model.

That model will see SkyCity “deal directly with International Business patrons after appropriate Know Your Customer and customer due diligence requirements are satisfied.”

The company added that it will consult with relevant gaming regulators in New Zealand, where it operates casinos in Auckland, Hamilton and Wellington and in Australia, where it recently completed an A$330 million upgrade of SkyCity Adelaide.

295 transactions linked with junkets were made in Melbourne in 2020, according to figures from Australia’s financial crimes watchdog.

In total, the Victorian casino made 50,000 reports to the watchdog in 2019, including almost 5000 relating to suspicious transactions.

AUSTRAC warned junket tour operators this month they were the target of organised criminal syndicates and foreign spies seeking to launder money through casinos and potentially make political donations.

Junkets bring in high roller gamblers from China to casinos and extend credit to them, enabling them to get around Beijing’s tight controls on capital.

AUSTRAC introduced a new risk assessment that identified some tour operators had links with criminal organisations.

Businesses, including casinos, are required to report any people or transactions that could be linked with crime using a suspicious matter report.

AUSTRAC chief executive Nicole Rose said casinos needed to comply with the rules to disrupt criminal activities, including foreign interference.

“Money laundering and financial crime enables serious criminal activity such as drug trafficking and human trafficking, which causes harm to our communities,” Ms Rose said.

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

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