In New Zealand, the Department of Internal Affairs is preparing to bring civil penalties against SkyCity Casino Management Limited (SCML), a subsidiary of the casino operator SkyCity Entertainment Group.
SkyCity will face legal action on the 16th of February. They relate to SCML allegedly not complying with New Zealand Anti-Money Laundering and Counter-Financing Terrorism Financing Act 2009.
SCML could be subject to a civil fine if the claim of the Department is accepted by the High Court in part or whole. In line with the Act, SkyCity’s maximum liability for the case would be NZ$8.0m (PS3.9m/EUR4.5m/US$4.9m).
SkyCity confirmed the news via a press release, stating that the proceedings are pending following a review on SCML’s conformity. SCML is the license holder for SkyCity’s land-based casino in Auckland, Hamilton and Queensland.
Five separate claims are included in the draft of the pleadings, which SkyCity describes as being “significant” issues of compliance with Act. SkyCity has not released any details, but says that they are primarily historical issues. SkyCity says that certain incidents had been reported to the department by SkyCity.
SkyCity has also stated that it is running a programme of enhancements to its anti-money laundering, counter-terrorism funding and compliance systems since the end 2021. This program aims at correcting historical deficiencies and addressing existing issues. The programme includes investments in technology and people, and reviews of systems and processes to identify improvement areas.
SkyCity is “disappointed’ over the non-compliance
SkyCity has committed to working closely with the Department to resolve any problems that may arise.
SkyCity stated that they were disappointed by their failure to meet the high standards required of them. This led to the Department taking action. SkyCity and SCML will work constructively to resolve the matter.
SkyCity has committed to improving its systems and processes, especially in the areas of anti-money-laundering and counter-terrorism funding and host-responsibility.
SkyCity would not comment at this time, as the case will go to court.
SkyCity suffers another blow
SkyCity was hit hard by several blows in 2023. The operator’s main concern is the potential suspension of its licence in New Zealand.
SkyCity Casino’s licence was suspended for approximately 10 days in September by the New Zealand secretary of Internal Affairs. The SCML subsidiary was included in this suspension. The civil case is unclear.
SkyCity is also a subject of discussion in Australia. The Australian Transaction Reports and Analysis Centre will launch federal proceedings near the end of the year 2022 against SkyCity for anti-money laundering failures at SkyCity Adelaide.
In May 2023, the operator launched a comprehensive review of its anti-terrorist funding and anti-money-laundering programmes. The order was issued by the South Australian gaming regulator, Consumer and Business Services. SkyCity also set aside AU$45m in August to cover a civil penalty that Austrac had imposed.
SkyCity made the announcement in October that Michael Ahearne would be stepping down as CEO. Ahearne will leave SkyCity in March to spend more time with family and return to Europe.
Earnings for 2024: Warning
SkyCity received yet another concerning report at the end of last year when it announced in December that adjusted EBITDA may decline for its financial year 2024. It was a surprise because it had previously said it would report an increase.
SkyCity estimated that adjusted EBITDA would be between NZ$290.0m to NZ$310.0m based on first five months. The company reported $310.0m of adjusted EBITDA in the FY23, and is forecasting a slight increase in FY24.
SkyCity has reduced its earnings guidance due to several factors. This includes a decline in revenue from electronic gaming machines in New Zealand, and an underperformance in Adelaide in Australia.