SkyCity Entertainment Group has reached an agreement to pay a total penalty of AU$67.0m (PS35.3m/EUR41.4m/US$44.9m) over historical anti-money laundering (AML) and counter-terrorism financing (CTF) failings at its Adelaide casino.
The proposal has been approved by the Australian Transaction Reports and Analysis Centre. (Austrac) and is currently with the Federal Court of Australia. SkyCity has submitted separate proposals for approval to the Federal Court of Australia at an hearing held on 7th June.
This penalty is for a criminal case which was brought to light by Austrac in December 2022. Austrac stated that SkyCity Adelaide had a history of “serious, systemic noncompliance with AML/CTF laws”.
Austrac initiated civil penalties proceedings in December 20,22 but the actual case dates back many years. In September 2019 an industry-wide campaign to ensure compliance began. SkyCity was notified in June 2021 of the alleged misconduct.
SkyCity’s failure to assess its money laundering and terrorist financing risks is a key issue. SkyCity did not implement risk-based controls and systems in AML/CTF programmes. Nor did it create a framework that would allow the board to oversee these projects.
Concerns include the lack of a monitoring program for transactions, and the inability to identify suspicious activities. Austrac said SkyCity did not have an enhanced due diligence program to conduct additional checks for higher-risk customers.
SkyCity announced in August of last year that it had put aside $45.0m to prepare for a civil fine. The final sum agreed upon with Austrac, however, is significantly more than that figure.
SkyCity’s executive chair apologizes for failings
SkyCity’s executive chair Julian Cook stated, “We recognize that as a casino, we have a critical role to play in fighting money laundering and terrorist financing, and protecting the community from these risks.”
We take our responsibility very seriously. However, the SkyCity Adelaide and SkyCity Boards and Management Teams sincerely apologize for not living up to expectations.
We know that we must do more to satisfy our customers, our regulators and our investors. “This is a long-term process.”
Brendan Thomas, CEO of Austrac, also spoke on this issue. The action is a reminder for casinos and gaming industry to be aware of money laundering risks and to adhere to their AML/CTF requirements.
Thomas stated that Austrac was concerned that SkyCity had allowed a number of practices, behaviors and relationships with customers that were high risk to go unchecked over a long period of time.
SkyCity responds to failings
SkyCity has acknowledged that it is working to correct the problems at its Adelaide Casino.
SkyCity Adelaide has appointed an independent expert who will review its AML/CTF program and other functions in order to find areas of improvement. The venue has undergone changes since the July 2021 event.
SkyCity has developed an AML program for Adelaide’s casino based on this. It says that this programme takes into consideration the failures listed in an initial complaint against the Adelaide casino.
SkyCity Adelaide also expanded the legal, compliance and financial crime teams and made numerous changes to its governance. SkyCity Adelaide has also made numerous governance changes and expanded its financial crime and legal and compliance teams.
“Our enhancement activities remain ongoing,” Cook said. Cook said that there was still work to be done in New Zealand, Australia and other countries.
We remain dedicated to providing safe, responsible environments and experiences for both our employees and customers. SkyCity is committed to working constructively and cooperatively with the regulators.
SkyCity: Wider Concerns
SkyCity, as Cook mentioned, has work to be done in New Zealand in order to address similar issues.
SkyCity was notified in February that civil penalties would be imposed on the company. New Zealand’s Department of Internal Affairs has filed a lawsuit in New Zealand’s high court against SkyCity Casino Management and the company’s parent, SkyCity Casino Management.
It relates to SCML allegedly not complying with New Zealand’s Anti-Money Laundering and Counter-Financing of Terrorism Act 2009. SCML may face up to NZ$8.0m in penalties if the claim is approved, whether it’s partially or fully.
The draft pleadings outline five “significant” issues of compliance with the Act. SkyCity claims that these are mainly historical issues, and some were already reported to the Department.
SkyCity also made changes to the senior management of its company. SkyCity’s new CEO, Jason Walbridge, is an experienced gambling executive.
Walbridge will begin in his new position at SkyCity this July. Michael Ahearne left the company last month. SkyCity announced Ahearne’s departure in October last year.
Julie Amey, who was previously the chief financial officer of SkyCity, has resigned from that position. Amey, who will officially step down from her position as SkyCity’s CFO on the 25th September, will remain in that role for another six months.
SkyCity also named Andrew McPherson chief information officer full time in March. Since November, he had served in this role as an interim.
