The Australian Transaction Reports and Analysis Centre (Austrac) launched federal proceedings against SkyCity in December last year. This related to failings at its SkyCity Adelaide facility in South Australia.
At the time, Austrac said the venue demonstrated “serious and systemic non-compliance” with AML and counter terrorist financing (CTF) laws.
Each contravention alleged by Austrac could result in a maximum civil penalty of between $18m and $22.2m.
The case has been ongoing over the past eight months. While proceedings remain at a relatively early stage, SkyCity has made the provision in anticipation of penalties and legal costs.
Penalties will relate to specific failings
SkyCity said estimating potential penalties at this stage remains “challenging”. However, it did note Austrac’s civil penalty proceedings to date show penalties are based on the specifics of each case.
These, SkyCity said, relate to factors such as the nature and extent of contraventions. Austrac will also consider loss and damage suffered, steps taken and the size and financial position of the business.
“The size of any penalty SkyCity Adelaide is exposed to could vary materially from the amount of the provision and significant uncertainties remain,” SkyCity said. “Any eventual civil penalty applied to SkyCity Adelaide in relation to the proceedings may be significantly higher or lower than the provision.
“The timing of any civil penalty to be paid by SkyCity Adelaide is also uncertain.”
Addressing Austrac’s concerns
SkyCity has already taken steps to address some of the issues flagged by Austrac during the proceedings.
In May, South Australia’s regulator, the Consumer and Business Services (CBS), ordered SkyCity to implement an independent review of its AML and CTF programmes. This covers the implementation of new enhancement programmes and the casino’s compliance with ongoing AML and gambling harm minimisation obligations.
Following the decision to open civil penalty proceedings against SkyCity, Hon Brian Martin’s review of SkyCity Adelaide’s suitability to hold a casino licence was placed on hold pending the case’s outcome.
Similar issues for Crown and Star
SkyCity is not the only major casino operator to face such issues in Australia. Both Crown Resorts and Star Entertainment have come under similar scrutiny in recent times.
Last month, Australia’s federal court completed proceedings against Crown for breaching anti-money laundering laws. The court ordered the operator to pay a penalty of AU$450m.
Star has been the target of multiple parliamentary inquiries into misconduct. In April, it engaged new cost and restructuring initiatives, warning it is experiencing “significant and rapid deterioration in operating conditions”.
Original article: https://igamingbusiness.com/legal-compliance/legal/skycity-provision-austrac-penalty/
