Agreed with the Australian Transaction Reports and Analysis Centre (Austrac), the proposal is now with the Federal Court of Australia. SkyCity and Austrac have put forward separate submissions for approval at a hearing on 7 June.
The penalty relates to a case that came to light in December 2022. At the time, Austrac said SkyCity Adelaide demonstrated a pattern of “serious and systemic non-compliance” with national AML and CTF laws.
While Austrac launched civil penalty proceedings in December 2022, the case actually dates back several years. An industry-wide compliance campaign began in September 2019, with SkyCity notified of alleged wrongdoing in June 2021.
Key issues include SkyCity failing to appropriately assess the money laundering and terrorism financing risks it faced. SkyCity also did not include risk-based systems and controls in AML and CTF programmes, nor did it establish a proper framework for board and senior staff oversight for these projects.
Other concerns include not creating an appropriate monitoring programme for transactions and identifying suspicious activity. Austrac also said SkyCity lacked an appropriate enhanced customer due diligence programme to carry out additional checks on higher risk customers.
In August last year, SkyCity said it had set aside $45.0m in anticipation of a civil penalty over the matter. However, the final amount agreed with Austrac is substantially more than this figure.
SkyCity executive chair apologises over failings
“We acknowledge that, as a casino operator, we play a key role in combatting money laundering and terrorism financing and safeguarding the community against these risks,” SkyCity executive chair Julian Cook said.
“While we take this responsibility seriously, we accept we have failed to live up to the standard required of us and for this, on behalf of the SkyCity and SkyCity Adelaide boards and management teams, I apologise.
“We know we need to do better to meet the expectations of our regulators, customers and our shareholders. This is a process that is already underway.”
Austrac CEO Brendan Thomas also commented on the matter. He said the action serves as an important reminder to casinos and the gaming sector to take their AML/CTF obligations seriously and be vigilant to money laundering and terrorism financing risks.
“Austrac took this action out of concern that SkyCity’s conduct meant that a range of high-risk practices, behaviours and customer relationships were allowed to continue unchecked for many years,” Thomas said.
SkyCity takes action over failings
In reaching the agreement, SkyCity notes how it has worked to address the failings at its Adelaide casino.
This includes appointing an independent expert to review SkyCity Adelaide’s AML/CTF programme and broader functions to identify areas for improvement. This took place in July 2021 and has led to changes at the venue.
On the back of this, SkyCity developed a comprehensive AML enhancement programme for the Adelaide casino. This, it says, takes into account failings listed in the initial case raised against the casino.
SkyCity Adelaide has also made numerous governance changes and expanded its financial crime and legal and compliance teams. Other changes include new investment in internal AML and CTF resourcing and capability, as well as strengthening its relationships with law enforcement agencies.
“Our enhancement activities remain ongoing,” Cook said. “We have further important work to do in New Zealand and Australia… which will take time to complete.
“We remain committed to ensuring that we provide safe and responsible experiences and environments for our people and customers. SkyCity will continue to engage cooperatively and constructively with regulators.”
Wider concerns for SkyCity
As referenced by Cook, SkyCity also has work to do in terms of addressing similar issues in New Zealand.
In February, it was confirmed SkyCity will face civil penalty proceedings in the country. New Zealand’s Department of Internal Affairs is filing proceedings in the high court against the operator and its SkyCity Casino Management (SCML) subsidiary.
This relates to SCML’s alleged non-compliance with the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 in New Zealand. If the claim is accepted, either in whole or partly, SCML could face a penalty of up to NZ$8.0m.
Draft pleadings set out five causes of action seen as “significant” compliance issues related to the Act. However, according to SkyCity, these mainly refer to historical matters, some of which were previously self-reported to the department.
Alongside this, SkyCity has made several changes to its senior management team. Just last month, SkyCity announced experienced gambling executive Jason Walbridge as its new CEO.
Walbridge is set to begin his new role at SkyCity in July this year. He is replacing Michael Ahearne, who exited the business last month. SkyCity first announced Ahearne would be leaving in October of last year.
Other recent changes include Julie Amey resigning from her position as chief financial officer. Amey will continue as CFO at SkyCity for a further six months, officially stepping down on 25 September.
In addition, SkyCity in March named Andrew McPherson as chief information officer on a full-time basis. He had been serving in the role on an interim basis since November.
Original article: https://igamingbusiness.com/legal-compliance/legal/skycity-austrac-agree-aus67m-penalty/
