Federal Court imposes AU$67m penalty on SkyCity Adelaide for AML/CTF violations
The ruling declared that SkyCity did not conduct appropriate customer due diligence, allowing high-risk customers to move money through the casino.
SkyCity Adelaide has been ordered by the Federal Court of Australia to pay an AU$67m ($44.7m) penalty following breaches of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act).
The ruling comes after AUSTRAC, Australia’s financial intelligence agency, initiated civil penalty proceedings against SkyCity for failing to meet the Act’s requirements.
Additionally, SkyCity has been ordered to pay AUSTRAC’s costs, totalling AU$3m.
The Federal Court found that SkyCity’s AML/CTF programs were insufficient and that the casino did not conduct appropriate ongoing customer due diligence. This failure allowed high-risk customers to move millions of dollars through the casino, obscuring the source and ownership of the funds.
As such, SkyCity’s non-compliance with the AML/CTF Act is believed to have exposed the Australian community and financial system to significant money laundering and terrorism financing risks.
SkyCity admitted that its deficiencies made it susceptible to criminal exploitation. The casino provided services through high-risk channels without adequate risk-based controls and failed to perform required checks on 121 customers, even when there were indications of higher money laundering risks or law enforcement interest.
The Federal Court’s decision follows a proposal submitted in May by AUSTRAC and SkyCity for a AU$67m penalty, taking into account SkyCity’s cooperation during the investigation and its admissions, which facilitated an early resolution of the proceedings.
AUSTRAC Acting CEO Peter Soros stated: “Criminals will always seek to take advantage of the gambling sector to clean their dirty money. If casinos and other gambling entities have weak anti-money laundering systems and controls, they leave themselves vulnerable to criminal exploitation.
“Today’s result shows AUSTRAC is prepared to take action when businesses, including casinos, fail to comply with the legislation. Businesses who ignore their obligations are affecting the Australian community by leaving the door open to criminal activity.”
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