The Crown (ASX:CWN) share price has fallen lower after Austrac released a risk assesssment advising junkets cause harm to community.
The post Crown Resorts (ASX:CWN) share price falls as Austrac calls junkets high risk appeared first on The Motley Fool Australia. –
The Crown Resorts Ltd (ASX: CWN) share price is edging lower today following the release of a risk assessment carried out by the federal agency Austrac. The assessment reported that junkets pose a high level of criminal risk and harm to the community.
Austrac is the Australian government intelligence agency set up to monitor money laundering, organised crime, and fraud.
At the time of writing, the Crown share price has fallen by 0.82% to $9.68.
What’s pushing the Crown share price lower?
In an article published on its website, Austrac has reported that junkets used by casino operators cause “harm to our communities”, and that prompt action is needed by casinos to increase their control measures.
Austrac went on to report that the risks associated with money laundering and terrorism financing arising out of junkets is high.
Austrac chief executive Nicole Rose said the casino sector has a responsibility to protect their businesses and the Australian community from criminal threats. She commented:
Money laundering and financial crime enables serious criminal activity such as drug trafficking and human trafficking, which causes harm to our communities.
The information contained in this risk assessment shows that junkets are highly vulnerable to criminal misuse, and Australian casinos must do more to mitigate risks. 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.
Crown Resorts has been on the regulator’s radar after it was revealed the casino paid illegal junket operators to attract high rollers from mainland China. This has been been investigated by Austrac, and has led to an inquiry by the New South Wales Government.
As reported in The Australian Financial Review, it’s been alleged that junket operators based in Macau and Hong Kong are suspected to have links with Chinese organised crime groups. Known as triads, they in turn are said to provide the junkets with money, protection, drugs, debt collection services and prostitutes.
In response to allegations, Crown has suspended all junket relationships until mid 2021. The ongoing inquiry into Crown’s dealings will decide whether the company is fit to hold a license in NSW.
The opening of Crown’s Sydney casino has also been delayed until February 2021, pending the outcome of the inquiry.
How has the Crown share price performed in 2020?
The Crown share price has fallen by nearly 20% in 2020. Crown shares began the year at $12.04 before dropping to around $6 in March, as COVID-19 lockdown restrictions forced the closure of the company’s venues. The Crown share price has since recovered to today’s levels, but is still a long way off its 52-week high of $12.71.
The company currently commands a market capitalisation of around $6.6 billion.
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Motley Fool contributor Eddy Sunarto has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Crown Resorts Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.