The woes for Australia’s casinos continue with the news that AUSTRAC is today commencing civil penalty proceedings in the Federal Court against SkyCity Adelaide.
The proceedings come after an enforcement investigation into SkyCity and relate to alleged serious and systemic non-compliance with Australia’s anti-money laundering and counter-terrorism financing (AML/CTF) laws.
The investigation was a result of AUSTRAC’s industry-wide compliance campaign that began in September 2019, and which has also seen civil penalty proceedings commenced against the Star Entertainment Group.
AUSTRAC Deputy CEO Peter Soros said: “AUSTRAC’s investigation identified a range of circumstances where SkyCity failed to carry out appropriate ongoing customer due diligence. SkyCity also failed to develop and maintain a compliant AML/CTF program, leaving it at risk of criminal exploitation.”
Soros said SkyCity’s ineffective approach to its AML/CTF program had left it vulnerable to criminal exploitation.
“The requirement for regulated entities to have appropriate AML/CTF controls and systems in place is not optional and should be taken seriously by all businesses regulated by AUSTRAC.
“AUSTRAC continues to work with SkyCity to ensure it complies with its obligations under the AML/CTF Act and to ensure it continues to meet its obligations in the future.
“This is the third civil penalty proceeding AUSTRAC has brought against businesses operating in the casino sector, It should serve as a warning to casinos and all other businesses regulated by AUSTRAC to take their AML/CTF obligations seriously and comply with the AML/CTF Act and AML/CTF Rules.”
AUSTRAC alleges that SkyCity:
Failed to appropriately assess the money laundering and terrorism financing risks it faced, including the likelihood and impact of those risks, and to identify and respond to changes in risk over time.
Did not include in its AML/CTF programs appropriate risk-based systems and controls to mitigate and manage the risks to which SkyCity was reasonably exposed.
Failed to establish an appropriate framework for Board and senior management oversight of the AML/CTF programs.
Did not have a transaction monitoring program to monitor transactions and identify suspicious activity that was appropriately risk-based or appropriate to the nature, size and complexity of SkyCity.
Did not have an appropriate enhanced customer due diligence program to carry out additional checks on higher risk customers.
Did not conduct appropriate ongoing customer due diligence on a range of customers who presented higher money laundering risks.
AUSTRAC said it will not provide further comment on the enforcement action or the details provided in the court documents as the matter will be before the court.
South Australia’s Liquor and Gambling Commissioner, Dini Soulio said he was aware of the civil proceedings. He added that AUSTRAC’s investigation had been running in parallel to the investigation into SkyCity’s suitability to hold a casino licence under the Casino Act, which he had initiated and which is being undertaken by the Honourable Brian Martin AO KC.
“I will now be considering the detail of the AUSTRAC proceedings to determine the next steps, and will be engaging with AUSTRAC, the board of SkyCity and Mr Martin KC,” Soulio said.
“As these matters are now before the Federal Court, it would be inappropriate to comment further at this time.”
In a statement to the ASX, SkyCity said AUSTRAC had informed the business of its proceedings, but that AUSTRAC has not yet identified the level of penalty it intends to seek in the event its claim is accepted in whole or in part by the Federal Court.
SkyCity said: “Given the matter will be before the Court it would be inappropriate for the company to comment further on the allegations at this stage.”
SkyCity said it will continue to cooperate with AUSTRAC more generally, particularly in the ongoing implementation of enhancements to its Adelaide AML/CTF control frameworks.