Daniel Williams

SkyCity Entertainment May Face Massive Fine in AUSTRAC’s Civil Lawsuit Alleging AML and CTF Breaches at Adelaide Casino

SkyCity Entertainment has revealed that it may have to make arrangements for a potential penalty it may be forced to pay over an alleged lack of compliance with the anti-money laundering and counter-terrorism financing laws in Australia. At the same time, the casino giant is also suffering from some damages associated with its casino operating permit in Adelaide.

Sky City revealed that the provision totals AU$45 million but still warned that the Australian Transaction Reports and Analysis Centre (AUSTRAC) could seek a larger civil penalty. In a regulatory filing posted earlier today, the gambling operator explained that the size of any penalty SkyCity Adelaide was exposed to could significantly vary in size depending on the amount of the provision and some major uncertainties that were still on the way. A representative of the casino giant further explained that the timing of any civil penalty to be paid by SkyCity Adelaide was also uncertain.

As revealed by the company, SkyCity also intends to write down the value of its casino licence in Adelaide by AU$45.6 million.

Despite the ongoing financial difficulties, the casino giant unveiled expectations for normalised EBITDA (earnings before interest, taxes, depreciation, and amortisation) of between NZ$300 million and NZ$310 million in the year through June.

Civil Proceedings in Federal Court Leave SkyCity in Quite an Uncertainty

As mentioned above, the AUSTRAC filed civil penalty proceedings against the casino company in Australia’s Federal Court in December 2022, over alleged violations of the country’s anti-money laundering and counter-terrorism financing legislation. In these civil proceedings against SkyCity Entertainment, the country’s financial crimes regulator alleged that each potential breach could attract a maximum penalty worth between AU$18 million and AU$22.2 million.

The lawsuit followed an investigation into the casino’s compliance with the country’s Anti-Money Laundering and Counter-Terrorism Financing Act that was given a start in June 2021.

The AUSTRAC claims that the gambling and casino giant failed to undertake the required due diligence on casino patrons in 124 instances from December 2016 on. It also alleged that the operator breached its own AML and CTF programme on multiple occasions.

In an August 14th filing, the company said that the company’s potential exposure is impossible to be estimated for the time being due to the relatively early stage of proceedings. It further noted that both parties were currently working towards agreeing on facts and potential admissions before the court identifies a process for any further controversial issues and any potential monetary penalty to be finally determined.

Last month, the Federal Court of Australia gave the nod to a record AU$450-million fine against Star’s local competitor, Crown Resorts, over some serious and repeated anti-money laundering and counter-terrorism financing violations at its casino operations in Melbourne and Perth. Now, Star Entertainment is also waiting to see the outcome of similar proceedings that were brought to court by the country’s financial crimes watchdog.

Apart from that, SkyCity is also the subject of an independent investigation by the Liquor and Gambling Commissioner of South Australia, with the review currently being on hold, as it is awaiting the Federal Court’s action on the AUSTRAC civil proceedings.

Olivia Cole

Olivia Cole has worked as a journalist for several years now. Over the last couple of years she has been engaged in writing about a number of industries and has developed an interest for the gambling market in the UK.

Daniel Williams

Author: Jerry Lewis