14 Aug

Gambling News

SkyCity allocates AU$45 million for Austrac penalty

SkyCity Entertainment Group has allocated a contingency of AU$45 million (£23 million/€27 million/US$29 million) in expectation of a civil penalty over anti-money laundering (AML) deficiencies in Australia.
Illicit gambling in Australia
In December of the previous year, the Australian Transaction Reports and Analysis Centre (Austrac) initiated federal proceedings against SkyCity. This pertains to deficiencies at its SkyCity Adelaide site in South Australia.

At that time, Austrac said that the venue exhibited “serious and systemic non-compliance” with anti-money laundering (AML) and counter-terrorist financing (CTF) regulations.

Each infraction claimed by Austrac may incur a maximum civil penalty ranging from $18 million to $22.2 million.

The case has persisted for the previous eight months. Although the procedures are still in their preliminary phase, SkyCity has allocated provisions for any penalties and legal expenses.

Penalties will pertain to particular deficiencies.
SkyCity stated that assessing potential penalties at this juncture is “difficult.” Nonetheless, it observed that Austrac's civil penalty actions thus far indicate that sanctions are contingent upon the particulars of each case.

SkyCity stated that these pertain to elements such as the kind and magnitude of violations. Austrac will also evaluate the loss and damage incurred, measures implemented, and the scale and financial status of the enterprise.

“The magnitude of any penalty to which SkyCity Adelaide is subject may differ substantially from the provision amount, and considerable uncertainties persist,” stated SkyCity. “Any potential civil penalty imposed on SkyCity Adelaide concerning the proceedings may differ substantially from the provision.” 

The timing of any civil penalty to be imposed on SkyCity Adelaide remains uncertain.

Responding to Austrac's apprehensions
SkyCity has commenced actions to rectify several concerns identified by Austrac throughout the proceedings.

In May, South Australia’s regulator, the Consumer and Business Services (CBS), mandated SkyCity to conduct an independent assessment of its Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) programs. This addresses the execution of new enhancement programs and the casino's adherence to continuous AML and gambling harm reduction commitments.

Subsequent to the resolution to initiate civil penalty proceedings against SkyCity, Hon Brian Martin's evaluation of SkyCity Adelaide's eligibility for a casino licence was suspended until the conclusion of the case.

Comparable concerns for Crown and Star
SkyCity is not the alone significant casino operator encountering such challenges in Australia. Crown Resorts and Star Entertainment have under comparable scrutiny recently.

Last month, Australia's federal court concluded proceedings against Crown for violating anti-money laundering regulations. The court mandated the operator to remit a fine of AU$450 million.

Star has been subjected to numerous parliamentary investigations about misbehaviour. In April, it implemented fresh cost and restructuring measures, cautioning that it is facing “significant and rapid deterioration in operating conditions.”