The Federal Court of Australia has ordered SkyCity Adelaide PTty Ltd to pay a AU$67 million fine ($44.6million /€41 million) following proceedings initiated by the Australian Transaction Reports and Analysis Centre (AUSTRAC).
According to the AUSTRAC investigation, which was launched in June 2021, the casino operator was charged with breaches of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act). These included:
- Failure to assess money laundering and terrorism financing risks it faced
- No appropriate risk-based systems and controls to mitigate and manage money laundering risks
- Failed to implement appropriate framework for Board and senior management oversight of the AML/CTF programs
- No transaction monitoring program to identify suspicious activity
- Lack of appropriate customer due diligence program for additional checks on higher risk customers
- No ongoing customer due diligence on customers who presented higher money laundering risks
The court upheld the charges and noted that SkyCity’s failure to comply with the AML/CTF Act over a prolonged period allowed high-risk customers to move millions of dollars through the casino.
The court also ruled that SkyCity must pay costs of AU$3 million.
AUSTRAC acting Chief Executive Officer, Peter Soros said said:
“Criminals will always seek to take advantage of the gambling sector to clean their dirty money. If casinos and other gambling entities have weak anti-money laundering systems and controls, they leave themselves vulnerable to criminal exploitation. Today’s result shows AUSTRAC is prepared to take action when businesses, including casinos, fail to comply with the legislation. Businesses who ignore their obligations are affecting the Australian community by leaving the door open to criminal activity.
Money laundering is not a victimless crime. It happens because criminals are trying to clean their dirty money obtained by lucrative illegal activities like trafficking drugs or humans, and it is often reinvested to further criminal enterprises and amplify these harms.”
This marks the second civil penalty AUSTRAC has secured against Australian casinos. Last year, the Federal Court mandated Crown Melbourne and Crown Perth to pay a $450 million penalty over two years for violations of the AML/CTF Act.
$45 Million Set Aside for Penalty
In August of 2023 SkyCity Entertainment Group announced that it had set aside AU$45 million ($29.2 million/€26.6 million) in its financial statement for the year ended 30th June 2023. This was intended to cover the expected penalty from AUSTRAC. However, with the costs of the case also factored in, the casino operators will need to pay an additional AU$25 million.
Following the court’s decision, SkyCity released a statement acknowledging the penalty.
Company to Appeal Casino Duty Ruling
In separate news, Sky City announced that the High Court has given the company leave to appeal the South Australian Court’s earlier appeal on a case involving SkyCity and the Treasurer of South Australia. The case is regarding the treatment of loyalty points that are converted to gaming machine play at the casino and how these points are treated when calculating casino duty.
The Treasurer and SkyCity are at odds over the interpretation of the agreement on casino duty. If found guilty, SkyCity would need to pay historical casino duty and interest of up to AU$22.8 million. However, if the company is successful in its challenge, that figure would be reduced to around AU$2 million.
Image credit: Michael Coghlan / CC BY-SA 2.0
Olivia has worked as an editor and writer for major brands across multiple niches. She now focuses on the iGaming and sports betting industries.
SkyCity Entertainment Group has been ordered to pay a hefty penalty of AU$67 million for breaching anti-money laundering laws at its Adelaide Casino. The penalty, which is the largest of its kind in Australian history, comes after an investigation by the Australian Transaction Reports and Analysis Centre (AUSTRAC) found that the casino had failed to comply with its obligations to prevent money laundering and terrorism financing.
The breaches occurred between 2015 and 2019, during which time SkyCity failed to adequately monitor and report suspicious transactions, conduct due diligence on high-risk customers, and maintain appropriate records. As a result, the casino was used by criminal syndicates to launder millions of dollars in illicit funds.
In response to the findings, SkyCity has acknowledged its failings and has committed to implementing a comprehensive anti-money laundering program to prevent future breaches. The company has also agreed to work closely with AUSTRAC to strengthen its compliance measures and ensure that it meets its legal obligations.
The penalty serves as a stark reminder to all businesses, particularly those in the gambling industry, of the importance of robust anti-money laundering measures. Money laundering poses a significant threat to the integrity of the financial system and can have serious consequences for both businesses and society as a whole.
In light of this case, it is crucial for businesses to take their anti-money laundering obligations seriously and to invest in effective compliance programs. By doing so, they can protect themselves from regulatory action, safeguard their reputation, and contribute to the fight against financial crime.
