SkyCity Entertainment Group’s Adelaide casino has become the latest gambling operation to face court action over alleged non-compliance with anti-money laundering and counter-terrorism financing laws.
It joins Star’s Sydney, Brisbane and Gold Coast casinos (and the company), Crown’s Melbourne and Perth casinos (and the company) in facing legal action from AUSTRAC (Australian Transaction Reports and Analysis Centre).
The SkyCity move follows an investigation by the regulator (AUSTRAC, in June last year, after probes in other Australian states found shortcomings at casino operators Crown Resorts and Star Entertainment Group Ltd.
Casino operators in Australia have been hit by damning reports of failing to enforce anti-money laundering rules, as well dysfunctional governance and poor corporate culture, while Covid lockdowns and restrictions have curbed or wiped out profits in the last two years.
Investigations into SkyCity found systemic failures in its approach to anti-money laundering and counter-terrorism financing laws, AUSTRAC said in a statement on Wednesday.
AUSTRAC’s allegations are extensive and include that SkyCity:
- “Failed to appropriately assess the money laundering and terrorism financing risks it faced, including the likelihood and impact of those risks, and to identify and respond to changes in risk over time.”
- “Did not include in its AML/CTF programs appropriate risk-based systems and controls to mitigate and manage the risks to which SkyCity was reasonably exposed.”
- “Failed to establish an appropriate framework for Board and senior management oversight of the AML/CTF programs.”
- “Did not have a transaction monitoring program to monitor transactions and identify suspicious activity that was appropriately risk-based or appropriate to the nature, size and complexity of SkyCity.”
- “Did not have an appropriate enhanced customer due diligence program to carry out additional checks on higher risk customers.”
- “Did not conduct appropriate ongoing customer due diligence on a range of customers who presented higher money laundering risks.”
South Australia’s gambling regulator also started an independent review of the company’s Adelaide casino in July. Regulators in Queensland and NSW launched after the event investigations of Star, and regulators in Victoria and WA also launched after the event investigations of Crown’s operations.
Media investigations and reports into Crown, and then Star sparked investigations by the NSW government against Crown originally, then Star. AUSTRAC announced its investigations into Australian casino operators in June, 2021.
SkyCity said the regulator was yet to decide the level of penalty it intends to seek.
AUSTRAC Deputy CEO Peter Soros said in Wednesday’s statement that the regulator’s investigations into SkyCity had found systemic failures in its approach to AML/CTF obligations.
“AUSTRAC’s investigation identified a range of circumstances where SkyCity failed to carry out appropriate ongoing customer due diligence. SkyCity also failed to develop and maintain a compliant AML/CTF program, leaving it at risk of criminal exploitation.”
“This is the third civil penalty proceeding AUSTRAC has brought against businesses operating in the casino sector, It should serve as a warning to casinos and all other businesses regulated by AUSTRAC to take their AML/CTF obligations seriously and comply with the AML/CTF Act and AML/CTF Rules.”
SkyCity’s ASX-listed shares fell 2.7% to $2.52.
For the company there’s the added question of what NZ regulators are doing, or will do about the company and its NZ casinos.
