SkyCity Entertainment, the operator of Adelaide Casino, recently announced that it has set aside a substantial sum of AU$45 million (USD 29M) to potentially cover a civil penalty resulting from an anti-money laundering case being heard in the Federal Court. These developments have sparked attention within the gambling and regulatory sectors.
The legal issue stems from action taken by the Australian Transaction Reports and Analysis Centre (AUSTRAC), which brought the case against SkyCity in December.
AUSTRAC alleged systematic non-compliance with anti-money laundering and counter-terrorism financing laws. The case underscores the critical role that robust anti-money laundering measures play in the gambling industry.
In response to the AUSTRAC case, SkyCity has not only allocated $45 million to cover potential penalties but also stated that its casino’s operating license has been “impaired” by an additional $45.6 million (USD 32M). This is a substantial financial adjustment that speaks to the complexity and potential gravity of the situation.
In a statement released to the stock exchange, SkyCity acknowledged the uncertainties surrounding the potential court penalty, indicating that it could be significantly higher or lower than the reserved amount.
The company noted that discussions with AUSTRAC are still in progress, aiming to agree on pertinent facts and possible admissions related to the case.
The allegations against SkyCity are weighty, with AUSTRAC claiming that the casino “failed to carry out due diligence on 124 customers.” Such a breach of anti-money laundering laws could result in astronomical fines, exceeding AU$2 billion.
Furthermore, AUSTRAC alleged that nearly AU$4 billion was laundered at SkyCity’s Adelaide casino over a six-year period, highlighting the scope of the alleged non-compliance.
The legal documents presented by AUSTRAC contained specific details about various customers involved. One particular customer, referred to as “customer 30,” was cited for allegedly claiming to work as a chef at a small restaurant as their primary source of funds.
Despite this claim, the individual purportedly turned over more than AU$34 million in a mere four years, a figure that raises serious concerns about the origin of the funds.
SkyCity’s response to these allegations and the potential financial implications has been multifaceted. The allocation of $45 million is a proactive measure aimed at addressing potential penalties.
Importantly, the company emphasized that this provision would not impact the anticipated “normalized earnings” for the 2023 financial year, a sign that it expects to navigate these challenges while maintaining its financial stability.
This legal action and its broader implications mirror similar cases within the gambling industry. AUSTRAC has also initiated proceedings against Star Entertainment, a company that owns casinos in New South Wales and Queensland.
Moreover, in a significant precedent, Crown Melbourne and Crown Perth were ordered to pay a substantial $450 million penalty (USD 291M) for violating anti-money laundering and counter-terrorism financing regulations.
Original article: https://www.yogonet.com/international/noticias/2023/08/15/68313-skycity-allocates-29-million-to-address-potential-civil-penalty-in-antimoney-laundering-case
