SkyCity facing 124 breaches of anti-money laundering and counter-terrorism financing laws

Billions of dollars was gambled at SkyCity Adelaide by “suspicious” customers over the past six years, the financial crimes regulator Austrac has alleged in a Federal Court action.

More than $4bn was gambled through SkyCity’s Adelaide casino by 59 suspicious customers, over six years, including individuals casino staff knew were facing money laundering and drug trafficking charges, a Federal Court claim lodged by the financial crimes regulator Austrac claims.

One of those customers was a farm hand who gambled $4.8m through the casino over three and half years, and was not banned from the casino until 10 months after he was jailed for more than eight years for money laundering and heroin trafficking, the court documents lodged on Wednesday by Austrac claim.

Another casino client, identified as customer 33 in the Austrac action, gambled more than $33m over the course of a year, and had told the casino they were at different times employed as a part time waiter, farm worker or cleaner.

The claim also says that in early 2021, SkyCity officers “circulated reports that customer 33 was a known drug dealer and a media article that contained a video of customer 33 attending a dinner with a person who was convicted for selling illicit drugs and money laundering’’.

Austrac is alleging SkyCity Entertainment Group engaged in “serious and systemic noncompliance” with Australia’s anti-money laundering and counter-terrorism financing laws and in its statement of claim, which runs to 800 pages, alleges that a widespread failure to monitor big-spending customers enabled a range of criminals to launder ill-gotten funds through the Adelaide casino.

“The casino operated by SkyCity is vulnerable to laundering of proceeds from a range of serious and organised crime activities including drug and tobacco offences, tax evasion, tax and welfare fraud and illegal gambling,” the claim says.

It is seeking penalties for 124 alleged breaches over the past six years, each carrying a maximum penalty between $18m and $22.2m.

Suspicious customers included foreign nationals - often junket operators and players - as well as Australian citizens.

“Many engaged in large cash transactions and transacted with cash that appeared suspicious

including in plastic bags, garbage bags, cash bundled together with rubber bands or irregular

straps, cash that was dirty and cash that appeared to have been buried,” the court filing says.

Meanwhile, the casino’s anti-money laundering team was under-resourced and did not receive adequate training, according to the filings.

The proceedings, launched on Wednesday, come after the financial crimes regulator started an enforcement investigation into SkyCity in June 2021.

Austrac deputy chief executive Peter Soros said its investigations into SkyCity found systemic failures in its approach to anti-money laundering and counter-terrorism financing (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,” he said.

SkyCity on Wednesday morning declined to comment on the allegations. The casino group said it would be “inappropriate for the company to comment further” given the matter will be before the court.

The gaming operator said it would “continue to co-operate with Austrac more generally” and noted the regulator had not identified the level of penalty it intended to seek.

SkyCity is also the subject of an independent review being conducted by retired Supreme Court Judge Brian Martin KC which will report back to the South Australian Liquor and Gambling Commissioner by February 1 on its suitability to continue to hold a casino licence.

Originally published as SkyCity facing 124 breaches of anti-money laundering and counter-terrorism financing laws