SkyCity reaches agreement over money-laundering probe
The operator of Adelaide’s casino has reached an agreement with the financial crimes watchdog and has put an extra $28 million aside to cover what it anticipates to be a “material civil penalty”.
Photo: Tony Lewis/InDaily
SkyCity Entertainment Group today told shareholders it had come to an agreement with AUSTRAC to admit in court to “serious breaches” of the Anti-Money Laundering and Counter-Terrorism Financing Act.
A financial penalty has also been agreed upon, which will be jointly proposed to the court by the two parties at a hearing on June 7.
It means a resolution of the legal matters may be reached during the 2024 financial year according to SkyCity, which was taken to court by AUSTRAC over allegations the casino engaged in “serious and systemic” non-compliance with the AML/CTF Act.
The financial crimes watchdog’s claim included allegations the casino failed to conduct ongoing customer due diligence on 59 people, that it made $74 million from “high-risk” customers who had reported links to organised crime, and that some gamblers at the North Terrace venue used “cash that appeared to have been buried”.
Today, SkyCity said it anticipated it would pay a “material civil penalty”.
“SkyCity Adelaide and AUSTRAC have jointly informed the Court that the parties have come to an agreement in relation to the contraventions that SkyCity Adelaide will admit in the proceedings and the amount of a civil penalty they will jointly propose as appropriate in the circumstances subject to finalisation of a Statement of Agreed Facts and Admissions,” the New Zealand-based casino operator said.
“As previously identified, a resolution of the matter will involve SkyCity Adelaide admitting serious breaches of the AML/CTF Act and the imposition by the Court of a material civil penalty.”
Further, SkyCity has upped its provision for the potential AUSTRAC civil penalty and associated legal costs from $45 million to $73 million.
“The revised provision is an estimate of the potential exposure to penalties and legal costs associated with the AUSTRAC civil penalty proceedings following discussions with AUSTRAC,” SkyCity said.
“Notwithstanding the indication provided to the Court, the final amount of any civil penalty and associated legal costs that SkyCity Adelaide may be required to pay remains uncertain.
“The level of any penalty is a matter for the discretion of the Court. Any eventual civil penalty applied by the Court to SkyCity Adelaide in relation to the proceedings may be significantly different than the provision.”
It follows SkyCity imposing an impairment on the value of its Adelaide casino licence to the tune of $45.6 million last year, following a review of the property.
Overall reported earnings before interest and tax were approximately $70 million in FY23 – a 3204 per cent increase.
The casino also faces a South Australian government investigation into whether SkyCity is fit to hold its casino licence. That investigation was “put on hold” while the AUSTRAC proceedings are ongoing.
Shares in SkyCity Entertainment Group are up by 3.68 per cent to $1.83 per share at the time of writing.