The Australian watchdog has published a risk assessment of the junket tour operations (JTO) sector. Junket tour operators bring wealthy gamblers to casinos by offering promotions and other services, with these ‘high-rollers’ paying the JTO.
The AUSTRAC assessment said: “The junket model has a number of money laundering vulnerabilities. A key vulnerability is the lack of transparency and level of anonymity created by the pooling of all players’ funds and transactions under the name of the JTO, and that the financial arrangements between the JTO and junket players are not disclosed to the casino.
AUSTRAC also found that that patronage by high risk customers from foreign jurisdictions is a key vulnerability associated with junkets.
“There is also a long and complex value chain associated with junkets’ funds flows that makes it difficult for a single reporting entity to understand the purpose of transactions or the beneficial owner/ultimate beneficiary of value moved.”
AUSTRAC’s report said a number of JTOs have been identified as having criminal or foreign political associations.
It said: “JTOs’ casino accounts are being used to facilitate the storage and movement of significant amounts of money, both domestically and internationally. On a per-transaction and per-customer basis, the junket tour operations sector is also significantly exposed to the risks associated with high-value cash activity. The destination of large cash withdrawals from JTO accounts remains a key intelligence gap.”
Gambling giant Crown Resorts last month said it would stop dealing with JTOs until they are licensed by the authorities. This followed concerns raised at an inquiry into Crown’s fitness to hold a license. Regulators forced Crown to delay opening a proposed new casino in Sydney until the findings of the inquiry are published in February.
Nicole Rose, chief executive of AUSTRAC 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”