AML body Austrac launches federal court proceedings against SkyCity
Austrac said the land-based casino operator demonstrated a pattern of “serious and systemic non-compliance” with the country’s anti-money laundering (AML) and counter terrorist financing (CTF) laws.
The civil penalty proceedings commence following an investigation into the New Zealand-based business, which SkyCity was notified of in June 2021. The probe itself was a product of an industry-wide compliance campaign initiated in September 2019.
The agency’s deputy CEO Peter Soros said that the business had seen a host of institutional failings in its approach to its AML/CTF obligations.
“Austrac’s investigation identified a range of circumstances where SkyCity failed to carry out appropriate ongoing customer due diligence,” he said. “SkyCity also failed to develop and maintain a compliant AML/CTF programme, leaving it at risk of criminal exploitation.”
SkyCity said that it was aware of the matter but refused to comment beyond outlining the specific contents of the prosecution’s case.
“Given that the matter will be before the court it would be inappropriate for the company to comment further on the allegations at this stage.”
AML and CTF failings
According to Austrac, SkyCity had failed to appropriately assess the money laundering and terrorism financing risks it faced. The operator also did not include risk-based systems and controls in its AML and CTF programmes or establish a proper framework for board and senior management oversight for these projects.
SkyCity was also found to have not created a “transaction monitoring programme to monitor transactions and identify suspicious activity that was appropriately risk-based or appropriate to the nature, size and complexity of SkyCity”.
In addition, Austrac said SkyCity lacked an “appropriate enhanced customer due diligence programme to carry out additional checks on higher risk customers.”
Ultimately, Soros said that the listed failings left the business 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,” he said.
“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.”
Wider Austrac crackdown
SkyCity is only the latest Australian-facing gambling operator who has been subject to enforcement action from the financial intelligence agency.
In March, Austrac launched civil proceedings against casino operator Crown Resorts for AML failings. In November the agency also launched federal court proceedings against Star Entertainment Group. Neither case is yet concluded.
Both land-based operators found themselves the subject of separate parliamentary inquiries following their implication in multiple anti-money laundering and social responsibility failings.
In September after an “extensive supervisory campaign” into Entain’s activities, the agency launched an enforcement investigation, citing AML and CTF concerns.