SkyCity agrees to $67 million fine after money-laundering probe
The operator of Adelaide’s casino has agreed to pay a proposed $67 million penalty for contravening money laundering laws after an inquiry by the federal financial crimes regulator.
SkyCity today told shareholders it had reached an agreement with the Australian Transaction Reports and Analysis Centre (AUSTRAC) relating to historical non-compliance with anti-money laundering and counter-terrorism financing (AML/CTF) laws.
It includes the company agreeing to pay a $67 million fine which remains subject to approval by the Federal Court and follows SkyCity setting more than $40 million aside last year to cover a potential penalty.
The agreement also includes a statement of agreed facts and admissions filed to the Federal Court which will consider the proposed penalty at a hearing on June 7.
SkyCity executive chair Julian Cook said the company was “pleased to have reached agreement with AUSTRAC, noting that the agreement remains subject to consideration and approval by the Federal Court”.
“This is a significant step in resolving the proceedings,” Cook said.
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“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.”
He added that SkyCity needed to “do better to meet the expectations of our regulators, customers and our shareholders, and this is a process that is already underway”.
AUSTRAC launched its investigation into SkyCity’s alleged contraventions of anti-money laundering laws back in 2022.
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The watchdog alleged the casino operator made $74 million from “high-risk” customers who had reported links to organised crime, and that some gamblers at the casino used “cash that appeared to have been buried”.
AUSTRAC also alleged that SkyCity Adelaide engaged in “serious and systemic” non-compliance with AML/CTF laws in its 800-page statement of claim.
In August last year, SkyCity put $45 million aside to cover potential penalties from the watchdog’s inquiry into the alleged breaches of money-laundering laws and declared the value of the company had plummeted via a $45.6 million impairment following the review.
Today, AUSTRAC said the penalty was “appropriate in all the circumstances” but that it was a matter for the court to determine the appropriate penalty.
SkyCity also admitted that it operated in contravention of the AML/CTF Act, and that it “did not carry out appropriate ongoing customer due diligence with respect to certain higher risk channels”.
AUSTRAC CEO Brendan Thomas said the action served as an important reminder to casinos and the gaming sector to take their AML/CTF obligations seriously and be vigilant to money laundering and terrorism financing risks.
“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,” Thomas said.
Today’s news follows the South Australian government announcing in April that it would dramatically increase how much it could fine the casino.
Consumer and Business Services Minister Andrea Michaels introduced new laws to Parliament that would increase maximum fines faced by Adelaide’s casino operator from $100,000 to $75 million.
If passed, it would be the first time the legislation has been updated since it was introduced in 1997, with Michaels saying the huge increase to fines available to the SA Liquor and Gambling Commissioner was made to bring South Australia in line with penalties interstate.
SkyCity remains under investigation on a state level, but that inquiry was put on hold while the AUSTRAC investigation was underway. That state investigation will look into whether SkyCity is fit to hold a casino license.
