SkyCity Sets Aside Tens of Millions for Anti-Money Laundering Penalties
LISTEN TO THIS ARTICLE:SkyCity Entertainment Group has allocated AU$45m to cover a possible civil penalty related to anti-money laundering (AML) deficiencies within Australia.
In December 2022, the Australian Transaction Reports and Analysis Centre (AUSTRAC) began federal proceedings against SkyCity due to failings at the SkyCity Adelaide location in South Australia.
Related: SkyCity Casino sued by AUSTRAC.
AUSTRAC stated that the venue showed “serious and systemic non-compliance” with both AML and counter-terrorist financing (CTF) regulations. The penalties for each violation can range from $18m to $22.2m.
While the case is still in its early stages, despite having been going on for eight months, SkyCity has already set aside the money in expectation of the penalties and associated legal expenses.
Uncertainties Surrounding the Potential Penalties
According to SkyCity, determining the exact penalty amounts at this point is “challenging”. However, the company did point out that in the past, AUSTRAC has handed out penalties based upon the specifics of each case.
SkyCity explained that this means factors such as the nature and the extent of the violations, any resultant harm or loss, corrective actions taken, and the financial standing 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. 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.
Measures Taken by SkyCity
SkyCity has already begun work on addressing some of the issues highlighted by AUSTRAC. In May, SkyCity was ordered to carry out an independent review of its AML and CTF programs by South Australia’s regulator, the Consumer and Business Services (CBS). It will look at the effectiveness of new enhancement programs and examine how the casino complies with existing AML and gambling hard reduction laws.
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