SkyCity Entertainment must appoint Adelaide casino monitor

The gaming group has been ordered to appoint an independent expert to monitor legal compliance at its Adelaide casino, as it fights a lawsuit over alleged money laundering breaches.

SA-Best MLC Frank Pangallo has slammed a decision allowing SkyCity to appoint its own independent expert to review anti-money laundering programs introduced at its Adelaide Casino.

The order for a review of the casino’s compliance programs, made by South Australia’s Liquor and Gambling Commissioner Dini Soulio on Monday, comes as SkyCity fights a lawsuit over alleged money laundering breaches launched by financial crimes watchdog Austrac.

Mr Soulio said the direction arose from issues identified in Austrac’s federal court proceedings, as well as from the Commissioner’s own investigation into SkyCity’s suitability to hold a casino licence.

“After evaluating all the material and considering SkyCity Adelaide’s responses to my concerns, I feel it is appropriate for SkyCity Adelaide to demonstrate it is meeting these important regulatory obligations,” he said.

“This is not a matter that I have taken lightly.

“I believe it’s important that the people of South Australia can have confidence that SkyCity Adelaide, as the licensee of the Adelaide Casino, is operating effectively to minimise gambling harm and ensure compliance with all anti-money laundering and counter-terrorism financing regulatory obligations.”

SkyCity Entertainment has been ordered to appoint an independent expert to monitor legal compliance at its Adelaide casino. Picture: Brenton Edwards

However Mr Pangallo said SkyCity’s control over the appointment was flawed.

“How can the expert be ‘independent’ when the casino is making the appointment – that is simply ludicrous and lacks any form of transparency or accountability,” he said.

“Any such appointment needs to be at arm’s length from the casino and made by Commissioner Soulio – and the costs incurred paid by the casino’s operators.

“The government needs to reverse that decision as a matter of urgency and reappoint a (Office of the Independent Gambling) Regulator and not leave such governance and control to a government agency that has long been regarded as a toothless tiger on consumer issues.”

Mr Soulio said he would work with SkyCity Adelaide in selecting the “Independent Monitor”, who would be able to seek amendments to the casino’s “enhancement programs” with the approval of the Commissioner.

“The Independent Monitor will not displace the role of the SkyCity Adelaide board, but will monitor SkyCity’s enhancement program implementation and operations to ensure that these objectives are met,” Mr Soulio said.

SkyCity Adelaide said in a statement that it would appoint a “suitably qualified” expert to oversee its anti-money laundering and counter-terrorism financing programs which it continued to refine across its operations.

“It is very important to us that our customers, community, and the regulators have confidence in our commitment to the highest standards of compliance, both in minimising gambling harm and ensuring we meet our AML/CTF obligations,” SkyCity chief operating officer Australia David Christian said.

“We will fully co-operate with the Commissioner in relation to the selection and appointment of the independent expert, and work closely with the independent expert.”

Austrac launched legal action in December against SkyCity in the Federal Court, alleging that criminals laundered almost $4bn at the Adelaide casino over a six-year period.

In a statement of claim totalling 800 pages, Austrac alleged a widespread failure to monitor big-spending customers enabled a range of criminals to launder ill-gotten funds through the casino – some of whom brought money into the casino covered in dirt after it appeared to have been buried.

“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 said.

The claim is seeking penalties for 124 alleged breaches, each of which carries a maximum penalty of between $18m and $22.2m. It follows earlier Austrac lawsuits against Crown Resorts and Star Entertainment over similar breaches.

The Liquor and Gambling Commissioner’s review, led by retired South Australian Supreme Court Judge Brian Martin KC, remains on hold pending the outcome of Austrac’s lawsuit.

SkyCity shares were trading steady on Monday at $2.12.