SkyCity Settles For $47m In AML Fines In Australia, New Zealand

May 21, 2024
Australasian casino operator SkyCity Entertainment Group has agreed to separate penalties totalling $47m with the Australian and New Zealand authorities over breaches of anti-money laundering laws.

Australasian casino operator SkyCity Entertainment Group has agreed to separate penalties totalling $47m with the Australian and New Zealand authorities over anti-money laundering (AML) laws breaches.

Australian financial transactions regulator AUSTRAC on Friday (May 17) announced that it had agreed to an A$67m ($44.5m) settlement with SkyCity over its failure to follow AML law and AML rules at its Adelaide casino, and the failure to execute due diligence on “higher risk” customers and transaction channels.

“AUSTRAC took this action out of concern that SkyCity’s conduct meant that a range of high-risk practices, behaviours and customer relationships were allowed to continue unchecked for many years,” AUSTRAC chief executive Brendan Thomas said.

Then on Tuesday (May 21), the New Zealand Department of Internal Affairs said it had reached a NZ$4.16m ($2.5m) settlement with SkyCity after the company admitted to five breaches of AML legislation at its various New Zealand casinos.

Both settlements are subject to court approval, with Australia’s Federal Court to assess the AUSTRAC settlement on June 7.

SkyCity executive chair Julian Cook said in a statement on Friday that the company “failed to live up to the standard required of us [in Australia] and for this, on behalf of the SkyCity and SkyCity Adelaide boards and management teams, I apologise.

“We know we need to do better to meet the expectations of our regulators, customers and our shareholders, and this is a process that is already underway”.

Cook offered similar words of apology to associated parties in New Zealand on Monday for compliance failures between 2018 and 2023.

In both statements, SkyCity listed remediation measures it is undertaking in both markets since regulators began to probe its subsidiaries in 2021, including board purges, enhanced audit and compliance structures, due diligence reform, and tighter risk parameters.

AUSTRAC launched legal action against SkyCity in December 2022.

“Our enhancement activities remain ongoing and we have further important work to do in New Zealand and Australia which will take time to complete,” Cook said.

“We have commenced a comprehensive multi-year transformation programme to strengthen how we manage risk across the SkyCity Group.”

The total settlements in Australia and New Zealand track closely with the A$48m in cash that SkyCity revised upwards in February to cover the penalties, in addition to legal fees.

AUSTRAC’s settlement against SkyCity is its second major penalty against a land-based casino over AML failings after pummelling Crown Resorts with an A$450m fine in May 2023.

A third major AML case, announced in November 2022, is proceeding against The Star Entertainment Group, which faces hundreds of millions of dollars in fines over what AUSTRAC called “innumerable” violations of AML requirements resulting from “serious and systemic non-compliance”.

Star also faces a permanent withdrawal of its casino licence in New South Wales state amid a second independent inquiry into its suitability, and intensifying pressure in Queensland state over its regulatory record at its two casinos there.

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