A landmark ruling by the Federal Court of Australia ordered SkyCity Adelaide to pay an AU$67 million ($44.1 million) fine for substantial breaches of anti-money laundering (AML) and counter-terrorism financing (CTF) laws, which occurred at its North Terrace casino. The venue reportedly failed to comply with legislative requirements and lacked crucial customer due diligence safeguards.
SkyCity Faces Substantial Challenges
AUSTRAC, the country’s federal financial crimes regulator, proposed the penalty after SkyCity Adelaide admitted it did not fully adhere to the provisions of the AML/CTF Act. The casino operator acknowledged that these failings could enable bad actors to conduct criminal activities, endangering the Australian public and potentially undermining the country’s financial system.
Peter Soros, AUSTRAC’s acting CEO, emphasized that the gambling sector could not safely function without stringent anti-money laundering measures. He noted that weak AML enforcement could enable criminal exploitation, which in turn facilitates further illegal enterprises, including organized crime like drug and human trafficking, which could extend beyond the country’s borders.
“Criminals will always seek to take advantage of the gambling sector to clean their dirty money.”
Peter Soros, AUSTRAC acting CEO
According to SkyCity’s admissions, the company had failed to conduct mandatory checks on 121 customers. Furthermore, the company’s senior management lacked adequate preparation to oversee its AML/CTF programs. These deficiencies are similar to those of competing operators Crown Resorts and Star Entertainment, which still face significant regulatory scrutiny due to their past failings.
There Is Hope on the Horizon
This newest ruling could have more than just financial implications for SkyCity Adelaide. The operator currently faces a state-level investigation to determine its suitability to hold a casino license. Failure to meet the state’s criteria could have disastrous repercussions for the company, potentially shutting down its businesses until it can regain compliance.
SkyCity’s troubles extend beyond Australia. February saw the company fall under the scrutiny of the New Zealand Department of Internal Affairs. The authority prepared to launch civil proceedings against the operator, citing alleged AML and CTF violations. If found guilty, SkyCity casinos in Auckland, Hamilton, and Queensland could face further monetary sanctions.
The ongoing compliance issues with high-profile Australian casinos highlight the country’s ongoing difficulties enforcing compliance within its gambling sector. Despite SkyCity’s deficiencies, the beleaguered operator can still follow in the footsteps of its rival Crown Resorts. Despite its much more substantial failings, Crown managed to rebuild and earn back the trust of regulators, giving hope to SkyCity.
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