SkyCity and the financial crime watchdog have agreed upon a penalty following a long-running investigation into alleged contraventions of anti-money laundering and counter-terrorism financing laws by its Adelaide casino.
The New Zealand company told the Australian Security Exchange on Thursday it had increased its provision for the penalty and associated legal costs from $45 million to $73 million following a joint decision with the Australian Transaction Reports and Analysis Centre (AUSTRAC) that has been put to the Federal Court.
AUSTRAC launched proceedings against SkyCity in December 2022, accusing the casino business of systemic non-compliance with the laws. AUSTRAC alleged SkyCity Adelaide allowed 59 high-risk customers to gamble more than $4 billion in dirty cash through its casino.
“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,” an ASX statement said.
The Federal Court has listed the matter for a hearing about the penalty on June 7. SkyCity told investors it expects the matter to be concluded by the end of this financial year.
Neither SkyCity or AUSTRAC would comment on the size of the proposed penalty, as the matter is before the court.
But Forysth Barr equities analyst Mark Robertson estimated the fine would be about $70 million, with legal costs likely amounting to between $1 million and $3 million extra. That would be a $28 million increase on SkyCity’s original August provision, but lower than previous expectations of a fine of about $100 million.
“This is a modestly better outcome than the $100 million fine related to AUSTRAC that we had assumed. While AUSTRAC and SkyCity have agreed on this amount, it is now up to the court to determine if this is a suitable penalty, which is highly likely,” Robertson said.
SkyCity’s share price rose 6.5 per cent to $1.88 following the announcement.
The casino group is still at risk of being stripped of its Adelaide casino licence pending a review by the South Australian government, which will remain on hold until after the AUSTRAC case has concluded. New Zealand regulators are also considering suspending SkyCity’s licence for a 10-day period over alleged breaches of laws over minimising gambling harm.
SkyCity is one of three casino businesses which has been accused of extensive breaches of the Anti-Money Laundering and Counter-Terrorism Financing Act.
Blackstone-owned Crown Resorts was fined $450 million last year following a lengthy AUSTRAC investigation. This is one of the highest penalties in corporate history and followed a 2019 investigation by this masthead and 60 Minutes, which revealed Crown had been infiltrated by international criminal syndicates and money launderers. Crown’s licences to operate its casinos in Perth, Melbourne and Sydney were suspended following inquiries by the respective state regulators.
ASX-listed Star Entertainment Group is also bracing for a penalty following an investigation by the financial watchdog. The business has provided $150 million for the potential AUSTRAC penalty, which represented about 10 per cent of its market capitalisation when the investigation was launched. A 2021 investigation by this masthead exposed the alleged contraventions of the act and led to the suspension of Star Entertainment’s licence to operate its Queensland and NSW casinos.
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Source: Thanks smh.com