SkyCity Casino Faces Legal Action for Alleged AML/CTF Breaches

Australias financial crime regulator, AUSTRAC, has initiated legal action against Adelaide’s SkyCity Casino in Federal Court. The regulator claims the casino operator engaged in substantial and widespread violations of Australias anti-money laundering and counter-terrorism financing (AML/CTF) regulations.

This lawsuit stems from an extensive AUSTRAC inquiry that commenced in September 2019 as part of a wider effort to address concerns within the casino sector. AUSTRAC presented its conclusions to SkyCity in June of the previous year.

Central to AUSTRAC’s case is the assertion that SkyCity neglected to adequately evaluate its exposure to money laundering and terrorism financing risks. AUSTRAC further contends that the casino’s AML/CTF program lacked sufficient risk-based mechanisms and safeguards to minimize and manage these threats. Moreover, it is alleged that SkyCity did not establish an appropriate structure for its board and executive leadership to supervise its AML/CTF program.

AUSTRAC’s probe revealed multiple instances where SkyCity purportedly failed to perform adequate due diligence on its patrons, particularly those categorized as high-risk. The agency asserts that SkyCity did not sufficiently examine these high-risk customers and neglected to conduct suitable ongoing due diligence on a considerable number of customers who posed a significant money laundering risk.

“AUSTRAC’s inquiry identified widespread deficiencies in SkyCity’s adherence to their AML/CTF responsibilities,” stated AUSTRAC Deputy Chief Executive Officer Peter Soros.

SkyCity finds itself in a difficult situation with Australian regulators for failing to uphold anti-money laundering and counter-terrorism funding regulations. In essence, AUSTRAC, the financial authority in Australia, alleges that SkyCity inadvertently facilitated criminal utilization of their gaming establishments for unlawful operations. The company faces a substantial penalty and possible legal proceedings, mirroring the events involving Star Entertainment Group recently. AUSTRAC remains tight-lipped regarding specifics of the situation as it is currently under judicial review.