The Australian Transaction Reports and Analysis Centre has followed the launch of federal court proceedings against Star Entertainment Group by taking a similar course of action against SkyCity regarding its Adelaide gaming venue.
The commencement of civil penalty proceedings, regarding which any potential financial penalty will be determined by the court, has come as a result of alleged serious and systemic non-compliance with Australia’s anti-money laundering and counter-terrorism financing laws.
This action stems from a compliance campaign that began in September 2019, which subsequently commenced an enforcement investigation into SkyCity Entertainment as well as Crown Resorts and Star Entertainment Group.
Peter Soros, AUSTRAC Deputy CEO, said that the financial watchdog’s investigations into SkyCity had found systemic failures in its approach to 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 program, leaving it at risk of criminal exploitation.”
Among the allegations into the Auckland-based firm as the it 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
Furthermore, it is said that it 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 and had a lack of appropriate enhanced customer due diligence program to carry out additional consumer checks.
It is also said that the company did not include in its AML/CTF programs appropriate risk-based systems and controls to mitigate and manage risks, in addition to not conducting appropriate ongoing customer due diligence on those that presented higher money laundering risks.
“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,” Soros added.
“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.”
Earlier in the year, South Australia’s Liquor and Gambling regulator has cited a “number of the matters raised to date” that it said highlighted “broader systemic issues within the casino industry,” upon launching an independent review of operations in the state.
This saw the SA regulator commission an independent review of SkyCity Adelaide to determine if the group is suitable to retain its casino licence.