Casino Operator Fined $67 Million for Anti-Money Laundering Failures

SkyCity Adelaide, a major casino operator in South Australia, has been ordered to pay a hefty fine of $67 million for breaches of anti-money laundering and counter-terrorism financing laws (AML/CTF). The Federal Court found that SkyCity Adelaide had failed to implement and maintain an effective AML/CTF program over a number of years. This lapse allowed high-risk customers to move millions of dollars through the casino without proper scrutiny, raising concerns about the source and ownership of these funds.

The Australian Transaction Reports and Analysis Centre (AUSTRAC), the country’s financial intelligence agency, initiated civil penalty proceedings against SkyCity Adelaide in December 2022. The lawsuit followed a thorough investigation into the casino’s compliance with AML/CTF regulations. In a statement, AUSTRAC emphasized the seriousness with which the Australian government views breaches of these laws, highlighting the potential for criminals to exploit casinos for money laundering activities.

According to court documents, SkyCity Adelaide’s shortcomings included inadequate customer due diligence procedures. These procedures are crucial for casinos to identify and assess the money laundering risks posed by their customers. The court found that SkyCity Adelaide failed to obtain and verify basic information about high-risk customers, including the source of their wealth and the legitimacy of their funds. This laxity created significant vulnerabilities within the casino’s financial systems.

The Federal Court’s decision reflects a growing trend of regulatory enforcement against Australian casinos for AML/CTF breaches. In 2023, Crown Resorts, which operates casinos in Melbourne and Perth, was hit with a record-breaking $450 million penalty for similar non-compliance issues. These hefty fines serve as a stark warning to the casino industry about the importance of robust AML/CTF controls.

SkyCity Adelaide has acknowledged its failings and has agreed to pay the $67 million penalty. The casino operator has also taken steps to address the identified shortcomings in its AML/CTF program. However, the full extent of the remediation efforts remains unclear. This case serves as a stark reminder of the potential consequences for casinos that fail to uphold their AML/CTF obligations. The significant financial penalty imposed on SkyCity Adelaide highlights the Australian government’s determination to safeguard the financial system from money laundering and terrorism financing risks.