Australia regulator launches civil proceedings against SkyCity

Australia’s financial regulator (AUSTRAC) has launched civil proceedings against SkyCity Entertainment over potential breaches of anti-money laundering and terrorist financing legislation.

The New Zealand operator warned that if the Federal Court accepts all of  the Australian Transaction Reports and Analysis Centre’s (AUSTRAC) findings, the cost to the company could be “material.”

said it understands that AUSTRAC has not yet identified the level of penalty it intends to seek.

The AUSTRAC action follows an investigation into all of Australia’s casino operators that began in September 2019. As a result of that probe, SkyCity was notified in June that year that it was the subject of an enforcement investigation.

The regulator late last month also said it had filed a civil suit against rival operator Star Entertainment Group. 

In its notice on Wednesday, AUSTRAC said SkyCity’s Adelaide casino had shown “serious and systematic non-compliance” with Australia’s AML and counter terrorism financing laws. 

“AUSTRAC’s investigation identified a range of circumstances where SkyCity failed to carry out appropriate ongoing customer due diligence,” AUSTRAC Deputy CEO Peter Soros said. “SkyCity also failed to develop and maintain a compliant AML/CTF program, leaving it at risk of criminal exploitation.”

Soros said the failures had left SkyCity Adelaide open to criminal exploitation. The regulator is working with the company to ensure that it meets its obligations in the future.

Australia’s casino industry has been in the regulatory spotlight since an investigative documentary in 2019 uncovered serious failings at Crown Resorts. 

The report triggered a series of regulatory inquiries in the states in which Crown operates, which all found the operator unsuitable to hold its license.

The probes were then widened to cover Star Entertainment and the broader industry.