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SkyCity Entertainment Group has received the green light to maintain its land-based casino license in Adelaide. This decision follows a report from South Australia’s gambling regulator, which found that the operator has made significant improvements to its anti-money laundering (AML) and counter-terrorism financing (CTF) measures.
An independent review conducted by retired Supreme Court Justice Brian Martin recognized the past errors made by SkyCity Adelaide. Despite acknowledging these shortcomings, the report indicated that the changes implemented have addressed many of the regulator’s concerns.
However, the review also emphasized the need for SkyCity to enhance its AML and CTF processes further. While there are still areas for improvement, the company’s immediate position in Adelaide is secure, allowing it to retain its exclusive license.
“If I’d been asked to determine suitability of the licensee and SCEG (SkyCity Entertainment Group) at the end of October 2021, the inevitable answer would have been that neither were suitable,” Martin said. “Since then, the situation has changed.
SkyCity Adelaide’s Shortcomings
The situation surrounding SkyCity Adelaide began in September 2019 when Australia launched a nationwide compliance campaign. In June 2021, the casino was alerted to alleged misconduct, prompting an investigation led by Justice Brian Martin shortly after.
By December 2022, the Australian Transaction Reports and Analysis Centre (AUSTRAC) had initiated federal court proceedings against SkyCity due to its failures in AML practices. Martin’s independent review continued, culminating in a full report released recently.
AUSTRAC outlined serious concerns, indicating that SkyCity Adelaide exhibited a pattern of “serious and systemic non-compliance” with AML and counter-terrorism financing (CTF) regulations.
The casino lacked risk-based systems and controls crucial for its AML and CTF programs. Additionally, it failed to establish an adequate framework for oversight from its board and senior management.
The investigation also revealed shortcomings in monitoring transactions effectively and identifying suspicious activities that match the scale and complexity of SkyCity’s operations. Furthermore, AUSTRAC pointed out that the casino did not implement an appropriate enhanced customer due diligence program, which is essential for conducting thorough checks on higher-risk clients.
In May 2024, SkyCity reached a settlement with AUSTRAC, agreeing to pay a penalty of AU$67 million (US$44 million). Although the company had anticipated a civil penalty of AU$45 million, the final amount exceeded expectations significantly.
SkyCity Accepts Failings and Promises to Improve Systems
Jason Walbridge, the company’s CEO, stated that SkyCity had accepted its failings and is now working to strengthen and improve its system to avoid future violations.
“We fully accept and acknowledge the findings of the report that we did not measure up to the standards required, and we apologise for those failings,” he said. “We further acknowledge that we still have work to do.
“We’ve made significant enhancements in terms of leadership, resourcing and systems. This includes a commitment to invest $60 million over three years to transform our culture, uplift our financial crime and host responsibility practices.
“Our team has worked hard to rise out standards, better meet obligations and improve how we look after our customers.”
SkyCity Could Still Face Further Action
Brett Humphrey, commissioner of South Australia Liquor and Gambling, also made comments about the latest report. He warned that while the casino can now continue with its license, it could face further action in the future.
“I accept Mr Martin’s findings that SkyCity Adelaide is suitable to hold and operate the casino licence and SkyCity Entertainment Group is suitable to be SkyCity Adelaide’s close associate,” he stated. “But let me be clear, this is by no means a clean bill of health for SkyCity Adelaide.
“Even though many of the issues raised have either been addressed or are being addressed through a programme of work being supervised by the independent monitor since August 2023, the deficiencies and breaches uncovered are deeply concerning.
“I am considering Mr Martin’s findings as well as ongoing work by Consumer and Business Services to determine what enforcement action I may take in light of these breaches.
“I will also be looking at what measures may be required for the ongoing future operations of the licence,” he concluded.
Source: iGB
