Federal Court Approves SkyCity Australia Settlement Agreement

Federal Court Approves SkyCity Australia Settlement Agreement

The Australian Federal Court has endorsed a settlement agreement between SkyCity Entertainment Group and the Australian Transaction Reports and Analysis Centre (Austrac), resolving civil penalty proceedings.

Last month, SkyCity Entertainment agreed to pay a civil penalty of AU$67.0 million (NZ $72.21m) for failings in anti-money laundering (AML) and counter-terrorism financing (CTF) protocols at its Adelaide casino. The agreement was presented for court approval on 7 June, resulting in the court sanctioning the penalty and ordering SkyCity to cover Austrac’s costs of AU$3.0 million (NZ $3.2m).

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Austrac’s Commitment to Enforcing Compliance

Peter Soros, Austrac’s CEO, was pleased with the outcome and the court’s decision, emphasising the importance of strict AML compliance across all businesses, including gambling operators. “Criminals will always seek to exploit the gambling sector to launder their illicit funds,” Soros stated. “Today’s outcome demonstrates Austrac’s commitment to enforcing compliance and protecting the community from criminal activities.”

Scoros adds:

“Money laundering has real victims. It occurs when criminals attempt to legitimise the proceeds of profitable illegal activities, such as drug or human trafficking, and this laundered money is frequently reinvested to support and expand further criminal operations, increasing the associated harms.”

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Identified Failings at SkyCity

The penalty relates to a December 2022 case where Austrac highlighted SkyCity Adelaide’s “serious and systemic non-compliance” with national AML and CTF laws. These issues date back several years, with SkyCity being notified of the alleged violations in June 2021 following an industry-wide compliance campaign initiated in September 2019.

Skyline was criticised for inadequate AML/CTF programmes and insufficient customer due diligence. Austrac noted that these failings allowed both national and international high-risk customers to move millions of dollars through the casino, neglecting the source and ownership of funds. Additionally, SkyCity provided services through high-risk channels without appropriate risk-based controls, failing to conduct necessary checks on more than 120 customers.

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SkyCity’s Response and Remediation Efforts

In response, SkyCity acknowledged its vulnerabilities and the risks posed to the Australian community and financial system. The gambling operator has since initiated extensive remediation measures, appointing an independent expert to review its AML/CTF programme in July 2021. This review has driven significant changes, including the development of an AML enhancement programme for the Adelaide casino.

SkyCity has also bolstered its governance structures and expanded its financial crime, legal, and compliance teams. The company is committed to investing in internal AML and CTF resources and strengthening its collaboration with law enforcement agencies.

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Addressing Concerns Raised by Austrac

This settlement is the second large penalty Austrac has secured against Australian casinos, following a AU$450.0 million sanction fee against Crown’s Melbourne and Perth casinos last year for similar breaches. Soros affirmed Austrac’s dedication to upholding AML/CTF laws, stating, “Our ongoing efforts serve as a warning to casino operators thinking they can neglect their obligations.” In Australia, gambling operators are required to obtain a licence by Austrac, with the country legalising both online and offline gambling.

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SkyCity’s Penalty in New Zealand

SkyCity has also addressed AML/CTF breaches in New Zealand, having recently settled with the Department of Internal Affairs (DIA) for NZ$4.16 million. This agreement, pending court approval, pertains to historical non-compliance issues, some of which were self-reported by SkyCity. The operator has implemented several measures to prevent future breaches. SkyCity’s proactive approach to addressing these failings and committing to ongoing improvements was well received by local authorities, but the court will have the final say on this.

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About SkyCity

The SkyCity group owns four land-based casinos in Australia and New Zealand: SkyCity venues can be found in Auckland, Hamilton, Queenstown, and Adelaide in Australia. SkyCity Wharf Casino is currently closed until further notice. Its online casino is operated from Malta where the company holds a licence by the Malta Gaming Authority (MGA). SkyCity online is aimed at players who are based in New Zealand and meet the minimum age requirement of 18 years and older. New players who sign up will enjoy a welcome package whilst other players have different ongoing promotions at their disposal. In our full review of SkyCity New Zealand online casino found below our casino review team are glad to share their findings.

Make Sure To Read: SkyCity online casino review.

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