Australia's financial regulator, the Australian Transaction Reports and Analysis Centre (AUSTRAC), has launched civil proceedings against SkyCity Entertainment Limited over potential breaches of anti-money laundering and terrorist financing legislation. AUSTRAC alleges that SkyCity breached the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act) by failing to report suspicious activity involving two groups of high rollers who were frequent gamblers at its casinos.
The New Zealand operator warned that if the Federal Court accepts all of AUSTRAC's findings, the cost to the company could be "material." SkyCity said it understands that AUSTRAC has not yet identified the level of penalty it intends to seek.
About the AUSTRAC civil suit against Star Entertainment Group
The Australian Transaction Reports and Analysis Centre (AUSTRAC) last month filed a civil suit against rival casino operator Star Entertainment Group. The regulator said it had also notified rival SkyCity in June that it was under investigation for possible non-compliance with Australia’s anti-money laundering (AML) and counter-terrorism financing (CTF) laws.
The suit against Star Entertainment follows a similar action AUSTRAC brought against Crown Resorts in April. Crown was fined $55 million after pleading guilty to breaching the laws, which require casinos to report large cash transactions and suspicious customer activity. SkyCity said it had cooperated fully with AUSTRAC’s investigations, including providing information about its compliance programs and processes over several years.
The investigation found that Adelaide casino—the only one of the company’s casinos located outside of New Zealand—had shown “serious and systematic non-compliance” with AML/CTF laws, according to AUSTRAC Deputy CEO Peter Soros.
“The failures have left SkyCity Adelaide open to criminal exploitation,” Soros said, according to the report. The regulator is working with the company to ensure that it meets its obligations in the future.
The Australian government has established a task force
Australia’s casino industry has been in the regulatory spotlight since an investigative documentary aired earlier this year; the report triggered a series of regulatory inquiries in the states in which Crown operates, all of which found that operator unsuitable to hold its license. The probes were then widened to cover Star Entertainment and other parties involved in Australia’s casino industry.
The Australian government has also established a task force to examine the country’s casino industry and determine whether it needs more regulation. The group is expected to make its recommendations by the end of this month.
Australians love to gamble
Gambling is an activity in which many Australians engage. Over 80 percent of Australian adults gamble at some point in their lives, which is the highest rate of gambling in the world. This number includes some 4 percent of the adult population who play the pokies once a week, accounting for some 62 percent of locals' annual gambling spending.
Total employment in the gambling industry in Australia (thousands of people) since 1984 Gambling is a significant public health issue, with around 80,000 to 160,000 (or 0.5 - 1.0%) of Australian adults experiencing significant problems from gambling and a further 250,000 to 350,000 (or 1.4 - 2.1% of adults) experiencing moderate risks that may make them vulnerable to problem gambling.