SkyCity Casino Is Being Sued by AUSTRAC
Australian government-run financial intelligence organization, AUSTRAC (Australian Transaction Reports and Analysis Centre), has begun a federal court investigation, with SkyCity Adelaide under the microscope, following charges of failure to comply with Anti-Money Laundering (AML) regulations. However, there is a charge even more serious than this, with their activities possibly flouting CTF (Counter-Terrorist Financing) Laws.
It is understood that the land-based casino has shown a pattern of suspicious activity relating to "serious and systemic non-compliance" with both of these laws, and it is up to a court to prove this.
Deputy CEO of the agency, Peter Soros, has outlined that the business had witnessed many institutional errors in line with its AML and CTF responsibilities.
AUSTRAC's investigation identified a range of circumstances where SkyCity failed to carry out appropriate ongoing customer due diligence.
SkyCity also failed to develop and maintain a compliant AML/CTF program, leaving it at risk of criminal exploitation.
The official line from SkyCity was that with the court date so close, any in-depth comment would be counter-productive, stating: "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."
How Severe Are the Charges?
From an industry perspective, the allegations that are leveled are about as bad as you can get - particularly those relating to CTF laws.
However, when taking a balanced approach and considering the intricacies of the laws and how hard these are for companies to police, there is certainly a considerable amount of conjecture.
While the technology for land-based casinos has improved dramatically over the last decade, when it comes to detecting tender, it raises questions about how effective SkyCity has in place.
Arguably, the main point of the investigation will be surrounding to what degree SkyCity has reduced the risk of AML and CTF, including how much this has been outside of its control.
There are, of course, a number of security measures that a casino can implement, such as customer background checks upon entry into a facility and whether a particular individual has a criminal record that relates to such suspicious activity.
The most intriguing question is how favorably a court may view the procedures SkyCity has in place and whether it has done enough to help combat this; no doubt, this will have a major effect on how severe the punishment will be.
AUSTRAC's main point of contention, and one of the major reasons why it has leveled charges, is that SkyCity had failed to adequately assess the risks related to both AML and CTF.
Soros also outlined that such failings had meant that the business had been left open to possible criminal exploitation and that it does not appear to have made changes, with this being one of several charges over the last couple of years.
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 revealed.
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.
What Is the Likeliest Outcome?
Due to the company appearing to have a history of such failings, there is certainly industry precedent for the court to file for the closure of SkyCity's Adelaide operation while even potentially launching an investigation into its other venues.
A heavy fine is another potential outcome, in addition to issuing industry bans for key company executives, whose purview AML and CTF laws fall under.
Star Entertainment is another Australian operator that has been under investigation for over one month, while Crown Resorts is currently facing the same charges for AML.
What is certain is that a major crackdown is needed in the country to combat money laundering in the industry, and perhaps more improved measures need to be implemented.