SkyCity and AUSTRAC Agree on Penalty for Historical Failings
SkyCity Entertainment Group has agreed to pay a total penalty of AU$67 million due to historical anti-money laundering (AML) and counter-terrorism financing (CTF) failures at its Adelaide casino.
SkyCity and AUSTRAC reach an agreement on AU$67 million penalty.
LISTEN TO THIS ARTICLE:The agreement with the Australian Transaction Reports and Analysis Centre (AUSTRAC) is currently awaiting approval from the Federal Court of Australia. Both SkyCity and AUSTRAC have submitted their proposals for a hearing scheduled on 7 June.
The penalty is linked to a case that emerged in December 2022. At that time, AUSTRAC highlighted SkyCity Adelaide's pattern of “serious and systemic non-compliance” with national AML and CTF laws.
Although AUSTRAC initiated civil penalty proceedings in December 2022, the issues date back several years. The industry-wide compliance campaign began in September 2019, and SkyCity was informed of the alleged violations in June 2021.
Numerous Problems Identified at SkyCity
Key problems identified include SkyCity’s failure to properly assess the risks of money laundering and terrorism financing. The company also lacked risk-based systems and controls in its AML and CTF programs and failed to establish adequate oversight by the board and senior staff for these initiatives.
Additionally, AUSTRAC noted that SkyCity did not create an appropriate transaction monitoring program or effectively identify suspicious activity. There was also no enhanced customer due diligence program to conduct extra checks on higher-risk customers.
In anticipation of a civil penalty, SkyCity had set aside $45 million in August last year. However, the final amount agreed with AUSTRAC is significantly higher.
More Regulation News
SkyCity’s Julian Cook Apologizes
SkyCity’s executive chair Julian Cook has apologized for the failings and promised to do better moving forward.
We acknowledge that, as a casino operator, we play a key role in combatting money laundering and terrorism financing and safeguarding the community against these risks. While we take this responsibility seriously, we accept we have failed to live up to the standard required of us 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. This is a process that is already underway.
AUSTRAC CEO Brendan Thomas also commented on the issue, emphasizing that this action is a crucial reminder for casinos and the gaming sector to take their AML/CTF obligations seriously and remain vigilant against money laundering and terrorism financing risks.
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