SkyCity braces for $73m money-laundering punishment

The gaming group has revealed it faces up to $73m in penalties and legal costs after admitting to serious breaches of anti-money laundering and counter-terrorism financing laws.

Gaming group SkyCity Entertainment says it faces up to $73m in penalties and legal costs after admitting to serious breaches of anti-money laundering and counter-terrorism financing laws.

The Australian Transaction Reports and Analysis Centre (AUSTRAC) launched proceedings in the Federal Court in 2022 against SkyCity Adelaide alleging it did not have a program to monitor transactions and identify suspicious activity that was appropriate to its size and complexity.

AUSTRAC also claimed SkyCity did not have an appropriate due diligence program to carry out additional checks on higher risk customers and did not conduct appropriate checks on customers who presented higher money laundering risks.

Shares in SkyCity, which operates casinos in New Zealand and Australia, rose 6.23 per cent to $1.88 on Thursday.

SkyCity said it had now reached an agreement with AUSTRAC that will see it admit to serious breaches under anti-money laundering and counter-terrorism finance laws and face a civil penalty.

“SkyCity Adelaide continues to co-operate with AUSTRAC in relation to the ongoing implementation of control frameworks,” the company said in a release to the ASX.

“As previously identified, the matter will involve SkyCity Adelaide admitting serious breaches of the laws and the imposition by the court of a material civil penalty.”

SkyCity has increased provisions for potential fines and legal costs resulting from the proceedings from $45m to $73m but said total payments remain uncertain.

SkyCity Adelaide

“The level of any penalty is a matter for the discretion of the court,” the company said.

“Any eventual civil penalty in relation to the proceedings may be significantly different than the provision.”

AUSTRAC alleged last year that casino staff knew some customers were facing money laundering and drug trafficking charges, including one customer who gambled $4.8m over three and a half years, but was not banned from the casino until 10 months after he was jailed for more than eight years for money laundering and heroin trafficking.

Austrac, has alleged in a lengthy claim filed with the Federal Court, that more than $4bn was gambled through the Adelaide casino by 59 suspicious customers over six years.

SkyCity at the direction of the South Australian gaming regulator Consumer and Business Services, last year appointed an independent expert to review and monitor its anti-money laundering programs.

SkyCity chairman Julian Cook said the company “was acutely aware and very disappointed that in Adelaide we have not met the standard to which we need to hold ourselves.”

Austrac said its regulatory priorities for 2024 would continue its focus on getting banks, money transfer businesses and those in the gambling sector to understand and mitigate the money laundering and terrorism financing risks they face.

Scrutiny by the financial crimes agency in previous years has resulted in heavy penalties for serious and systemic breaches of anti-money laundering and counter-terrorism financing laws, including $1.3bn on Westpac in 2020, $700m on CBA in 2018, and $450m on Crown earlier this year.

The regulator, which has been criticised in the past for being too soft and too slow to combat organised crime, is nonetheless Australia’s most feared regulator because of the heavy fines and costs of its action.