The Crown Resorts Ltd (ASX: CWN) share price has come under pressure this morning after the financial watchdog moved closer to charging the casino operator.
The Crown share price slumped 1.7% to $12.48 at the time of writing when the S&P/ASX 200 Index (Index:^AXJO) slipped 0.2%.
The Australian Transaction Reports and Analysis Centre (AUSTRAC) announced that it has identified potential serious non-compliance with Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) laws by Crown Perth.
Bad news doesn’t stop for Crown share price
AUSTRAC started its formal enforcement investigation against Crown Resorts in October last year. Today’s news is a significant negative development against the Crown share price.
But it gets worse. Crown revealed that it may have also broken the law at its Melbourne casino.
“The Crown Board has recently received legal advice that a practice that existed at Crown Melbourne between 2012 and 2016 contravened section 68 of the Casino Control Act,” said Crown in an ASX statement.
“This practice involved Crown receiving payment from debit or credit cards of international guests at Crown Melbourne’s Crown Towers Hotel, with the funds then available to the patron for gaming at the Casino (the hotel card process).”
Fessing up to more bad behaviour
Section 68 of the Casino Control Act prohibits a casino operator from providing cash or chips from a patron’s credit or debit card, which will be used for gambling.
Crown admitted that it transacted $160 million through such a process before terminating the practice in November 2016.
“Crown is continuing its investigations into these matters, including whether it may have breached other laws by reason of the hotel card process,” added the company.
“Crown has notified the VCGLR and the Victorian Royal Commission of the matters the subject of this release.
“Crown will also notify all other relevant regulators and the Western Australian Royal Commission of these matters.”
AUSTRAC investigates other ASX shares
AUSTRAC declined to comment further on this development when contacted by the Motley Fool as investigations are ongoing.
The regulator has also commenced enforcement investigations in Star Entertainment Group Ltd (ASX: SGR).
Crown has become a takeover target since its illegal practices were uncovered in New South Wales. Star Entertainment is one of the bidders for Crown as it is hoping to merge with its rival.
Why the NAB share price is underperforming too
Separately, AUSTRAC announced today that it initiated a formal enforcement investigation into the National Australia Bank Ltd. (ASX: NAB).
The NAB share price is also underperforming other ASX big bank shares. The NAB share price fell 2.8% to $26.73 at the time of writing.