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Auckland-headquartered casino operator SkyCity Entertainment Group (ASX: SKC) has reached a non-binding agreement to pay $21 million in penalties to South Australia's gambling regulator, resolving all outstanding matters stemming from an independent review that found significant failings in governance and anti-money laundering compliance at Adelaide Casino.
The $21 million fine, to be paid in three equal $7 million instalments, was agreed under a heads of agreement struck with South Australia's Commissioner for Liquor and Gambling.
The settlement follows the findings of retired Supreme Court Judge Brian Martin, whose independent review last year found SkyCity would have been deemed unsuitable to hold its casino licence as recently as October 2021 but concluded the company had since done enough to retain it.
The news comes after SkyCity was hit with a $67 million penalty in the Federal Court in June 2024 after financial intelligence agency AUSTRAC took action over breaches of anti-money laundering and counter-terrorism financing laws at Adelaide Casino.
The South Australian fine takes the company's total regulatory penalties for the Adelaide operation to $88 million.
South Australia enacted new laws in April 2024 raising maximum casino penalties to $75 million, but the $21 million settlement figure sits well below that ceiling. The heads of agreement is non-binding, with a final tripartite deed yet to be executed.
“Reaching this in-principle agreement is an important step for SkyCity and reflects the significant work our team has done over the past four years to transform our compliance culture, strengthen our governance, and earn back the trust of our regulators," says SkyCity CEO Jason Walbridge.
"We accept the findings that led to this outcome and take seriously the obligations we have committed to.
"The structural changes for the Adelaide Casino - including an independent Adelaide board and locally accountable leadership - reflect a genuine commitment to operating as a responsible casino operator.
"We are grateful for the constructive engagement of the Commissioner's office throughout this process.”
Martin's review found SkyCity had failed to adequately manage money laundering risks and had allowed governance weaknesses to persist across its Adelaide operations over an extended period.
However, the review acknowledged the company had embarked on a substantial remediation effort and was now on a credible path to compliance.
SkyCity has committed to investing $60 million over three years on its compliance transformation program, known internally as B3, which is expected to complete by June 2027.
The binding tripartite deed formalising the A$21 million penalty is expected to be finalised in the coming weeks, subject to agreement on final terms between SkyCity, the commissioner and the South Australian Government.
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