SkyCity to Pay $70 Million in Penalties Following Anti-Money Laundering Failures at Adelaide Casino

SkyCity is set to pay $70 million in penalties and legal costs after a series of anti-money laundering (AML) failures at its Adelaide casino. Last month, SkyCity, which operates several casinos in Australia and New Zealand, agreed to a $67 million fine negotiated with AUSTRAC, the Australian government’s financial intelligence agency.

AUSTRAC had discovered that SkyCity Adelaide had failed to perform due diligence on over 120 customers, including cases where "knew customers were the subject of law enforcement interest.” The regulator stated that SkyCity allowed high-risk patrons to gamble more than $4 billion in illicit funds through its Adelaide casino.

The $67 million penalty was negotiated due to SkyCity's failings, but the settlement required approval from the Federal Court of Australia. AUSTRAC announced today that the Federal Court approved the $67 million penalty and also ordered SkyCity to pay AUSTRAC’s legal costs of $3 million.

“SkyCity’s failure to comply with the AML/CTF Act over many years allowed high-risk customers to move millions of dollars through the casino, in ways that made the source and ownership of the funds unclear,” AUSTRAC said in a statement. The organisation added that SkyCity’s AML problems and its failure to perform “appropriate ongoing customer due diligence” made SkyCity Adelaide “vulnerable to criminal exploitation.”

“SkyCity has taken steps to address the issues identified in these proceedings, however, this remediation remains ongoing,” AUSTRAC stated.

This ruling marks the second civil penalty AUSTRAC has secured against Australian casinos. Last year, the Federal Court ordered casino and resort businesses Crown Melbourne and Crown Perth to pay a $450 million penalty over two years for breaches of the AML/CTF Act.

AUSTRAC noted that SkyCity’s lower $67 million penalty considered the company’s cooperation during the investigation and “admissions enabling early resolution of the proceedings.”

Peter Soros, AUSTRAC’s acting CEO, emphasized that these penalties should serve as a stark reminder for casinos to comply with AML rules. “Criminals will always seek to take advantage of the gambling sector to clean their dirty money,” he said. “If casinos and other gambling entities have weak anti-money laundering systems and controls, they leave themselves vulnerable to criminal exploitation."

Mr. Soros highlighted that SkyCity’s penalties demonstrate AUSTRAC’s commitment to taking action when casinos fail to comply with legislation. “Businesses who ignore their obligations are affecting the Australian community by leaving the door open to criminal activity,” he stated. “Money laundering is not a victimless crime. It happens because criminals are trying to clean their dirty money obtained by lucrative illegal activities like trafficking drugs or humans, and it is often reinvested to further criminal enterprises and amplify these harms.”

By fLEXI tEAM