The Federal Court of Australia has ordered SkyCity Entertainment Group to pay AU$67 million ($44.2 million) of civil penalty following a money laundering case.
The ruling was in relation to a case brought on by the Australian Transaction Reports and Analysis Centre (AUSTRAC). SkyCity and AUSTRAC agreed on the penalty amount last month. This resolution, now approved by the court, addresses historical anti-money laundering (AML) and counter-terrorism financing (CTF) deficiencies at SkyCity’s Adelaide casino.
The court also mandated SkyCity to cover AUSTRAC’s legal costs of $3 million.
Allegations in court documents revealed that the casino had clientele with connections to organized crime, loan sharking, human trafficking, and sex slavery. An AUSTRAC spokesperson noted that SkyCity did not conduct adequate ongoing customer due diligence, allowing high-risk customers to channel millions of dollars through the casino over several years.
“SkyCity admitted that its contraventions made it vulnerable to criminal exploitation, and exposed the Australian community and financial system to money laundering and terrorism financing risk,” the spokesperson said.
“It (SkyCity) failed to carry out required checks on 121 customers, including where SkyCity knew customers were the subject of law enforcement interest, or where there were indications that some posed a higher risk of money laundering.”
Peter Soros, AUSTRAC’s acting chief executive, emphasized the importance of compliance with anti-money laundering laws, stating that casinos, like all businesses, must fulfill their AML obligations.
“Today’s result shows Austrac is prepared to take action when businesses, including casinos, fail to comply with the legislation. Businesses who ignore their obligations are affecting the Australian community by leaving the door open to criminal activity,” Soros said.
In May, both SkyCity Adelaide and AUSTRAC filed a joint submission proposing the AU$67 million penalty to resolve the casino’s misconduct. Meanwhile, South Australia’s Consumer and Business Services department had previously appointed retired Supreme Court judge Brian Martin KC in 2022 to investigate SkyCity’s suitability to operate the casino. This investigation was paused while AUSTRAC pursued the matter in Federal Court.
Since AUSTRAC’s allegations, SkyCity has initiated measures to address the identified issues. The company appointed an independent expert in July 2021 to review its AML/CTF programs at the Adelaide casino and other operations. This review has prompted significant changes at the venue.
The casino has also developed an AML enhancement program for the Adelaide casino, incorporating improvements based on the initial case findings. The casino has also made governance changes, expanded its financial crime, legal, and compliance teams, and committed to increased investment in AML and CTF resources. Additionally, SkyCity has strengthened its cooperation with law enforcement agencies.
In a related legal issue, SkyCity announced that the High Court has agreed to hear its appeal regarding the calculation of state government taxes on loyalty reward points. The casino disputes whether these points should be considered taxable revenue when converted for gambling. An earlier ruling by the South Australian Supreme Court had gone against SkyCity, and if the appeal is unsuccessful, the casino may owe more than AU$22 million ($14.5 million).
Original article: https://www.yogonet.com/international/noticias/2024/06/07/72556-federal-court-orders-skycity-adelaide-to-pay-44-million-fine-over-money-laundering-failings
