AUSTRAC and SkyCity Adelaide Agree to $67M Penalty Proposal

Gaming and entertainment company that provides sports, amusement, and recreation services, SkyCity Adelaide Pty Ltd (SkyCity), and the Australian Transaction Reports and Analysis Centre (AUSTRAC) have filed joint submissions with the Federal Court of Australia. 

Their proposed AU$67 million penalty mentioned in the joint submissions was deemed appropriate in the context of the casino’s contravention of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act).

SkyCity Admitted to Breaching Parts of the AML/CTF Act

The court has set the date of the hearing for June 7, when Justice Lee will ponder the parties’ proposed settlement and establish whether the proposed penalty amount would suffice in all the circumstances. 

When reaching the agreement, SkyCity admitted that it did not fully comply with the AML/CTF Act. 

The company explained its AML/CTF Programs failed to meet the requirements of the AML/CTF Act and Rules, in contravention of section 81.

SkyCity also admitted to not effectively completing ongoing customer due diligence regarding higher-risk customers as well as customers who were completing transactions via higher-risk channels, which went against section 36.

High-Risk Practices “Allowed to Continue Unchecked For Many Years”

As argued by AUSTRAC’s chief executive officer, Brendan Thomas, they “took this action out of concern” that SkyCity’s conduct meant that a series of high-risk customer relations, behaviors, and practices were allowed to carry on “unchecked for many years.”

Thomas called the action an important reminder for the gaming industry and casinos to take all of their AML/CTF obligations seriously and keep a close eye on all risks regarding money laundering and terrorism financing.

In March, the Australian Government agency responsible for detecting and disrupting criminal abuse of the financial system and keeping communities safe from organized crime launched an AML probe into Bet365’s Hillside brand.

At the end of last May, South Australian Liquor and Gambling commissioner Dini Soulio required SkyCity Adelaide to appoint an independent expert to revise its AML and CTF programs, according to Section 10 of the Gambling Administration Act 2019, 

The decision was expected to provide an “independent perspective” regarding casino’s AML and CT financing programs while also adding an extra layer of assurance. 

The independent expert was also asked to conduct similar procedures in relation to the minimization of gambling harm.

The SkyCity Entertainment Group has over 3,400 employees based in Australia and New Zealand and also owns and operates various Auckland, Hamilton, and Queenstown casinos.