SkyCity Adelaide inquiry resumes after AUSTRAC secures $67m judgment against casino group

SkyCity Adelaide inquiry resumes after AUSTRAC secures $67m judgment against casino group

Photo: SkyCity, via Facebook

The inquiry to determine the suitability of SkyCity to hold a South Australian casino licence is set to resume after a successful prosecution by anti-money laundering regulator AUSTRAC last week that led to a $67 million fine against the company.

South Australia’s Liquor and Gambling Commissioner had put the inquiry on hold pending the outcome of the civil case.

The Federal Court last week found that SkyCity Adelaide Casino’s anti-money laundering and counter-terrorism finance programs failed to meet the requirements of the AML/CTF Act, and that it did not carry out appropriate ongoing customer due diligence.

The Liquor and Gambling Commissioner today announced that retired Supreme Court Judge Brian Martin, KC, will resume his investigation into the SkyCity Adelaide Casino with the probe expected to be completed by the end of this year.

However, the concerns raised by AUSTRAC in its civil action led the commissioner last year to appoint an independent monitor to review the casino’s AML/CTF programs ahead of the inquiry resuming.

“Mr Martin’s investigation was placed on hold after anti-money laundering regulator AUSTRAC commenced proceedings in the Federal Court, accusing SkyCity Adelaide of serious and systemic non-compliance with anti-money laundering and counter-terrorism financing laws,” says a statement from SA’s Minister for Consumer and Business Affairs Andrea Michaels.

“At the time, Mr Martin advised he could not determine the question of whether SkyCity Adelaide was suitable to hold the Casino licence until the AUSTRAC proceedings were resolved.

“As a result of the allegations raised in the AUSTRAC proceedings and preliminary materials from Mr Martin’s work, the Liquor and Gambling Commissioner directed SkyCity Adelaide to appoint an independent monitor to oversee a program of work aimed at ensuring the casino was meeting its anti-money laundering and counter-terrorism financing obligations and its obligations in relation to minimising gambling harm.”

The Federal Court found that SkyCity’s failure to comply with the AML/CTF Act over many years allowed high-risk customers to move millions of dollars through the casino “in ways that made the source and ownership of the funds unclear”.

In addition to a $67 million fine, SkyCity was ordered by the Federal Court to pay $3 million in AUSTRAC’s costs.

“The serious and systemic issues raised in the AUSTRAC proceedings simply cannot be ignored,” says Michaels.

“They are unacceptable and do not meet our expectations of how the holder of South Australia’s only casino licence should be acting. This independent investigation will be crucial in determining the regulator’s next steps.”

The Minister for Consumer and Business Affairs says the government has moved to “significantly strengthen” the penalties available to the regulator for breaches to state gambling laws and the conditions of SkyCity’s casino licence. Penalties of up to $75 million are being considered by the State Parliament, up from a current maximum of $100,000.

Acting Liquor and Gambling Commissioner Fraser Stroud says Martin’s earlier work undertaken in his review of SkyCity’s operations position the KC to lead the resumed investigation and provide the “most effective way to determine the suitability of the casino licensee”.
 
“Since Mr Martin’s review was placed on hold, Kroll Australia has been appointed to oversee SkyCity Adelaide’s work in addressing deficiencies in its anti-money laundering and counter-terrorism financing obligations,” says Stroud.

“These developments will be taken into account as Mr Martin resumes his investigation.”

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