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Adelaide's SkyCity casino has reached an agreement with the nation's financial crime watchdog to pay a penalty of $67 million over its contraventions of laws around anti-money laundering and counter-terrorism financing (AML/CTF), with its executive chair admitting the group "failed to live up to the standards required".
The amount is around three-quarters of the $90 million provision flagged in the company's FY23 results in anticipation of a more substantial fallout.
The agreement between SkyCity Adelaide and the Australian Transaction Reports and Analysis Centre (AUSTRAC) is still subject to court approval from a hearing due on 7 June that will consider the proposed settlement.
The announcement comes almost three years after AUSTRAC commenced investigations into the casino, which uncovered alleged "systemic failures" in meeting AML/CTF obligations with the company lacking in its framework for how the board and senior management can manage risks, and its monitoring of transactions and levels of customer due diligence.
AUSTRAC launched civil penalty proceedings against SkyCity in the Federal Court in December 2022, around one week after filing similar proceedings against The Star Entertainment Group (ASX: SGR), whose misdeeds have led to $200 million in fines levied by NSW and QLD governments.
In May last year another casino operator, the now Blackstone-owned Crown Resorts, reached a deal with AUSTRAC to pay $450 million for breaches of the same act at its operations in Melbourne and Perth.
"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," says AUSTRAC’s chief executive officer Brendan Thomas.
Thomas says the action serves 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.
Julian Cook, the executive chair of the Adelaide casino's New Zealand-based parent company Sky City Entertainment Group (ASX: SKC), says the group is pleased to have reached an agreement with AUSTRAC, noting it still remains subject to consideration and approval by the Federal Court.
"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," he says.
"While we take this responsibility seriously, we accept that 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.
"We know we need to do better to meet the expectations of our regulators, customers and our shareholders, and this is a process that is already underway."
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