SkyCity Entertainment’s SkyCity Casino Management (SCML) is facing legal action in New Zealand after allegedly breaching the country’s Anti-Money Laundering and Countering Financing of Terrorism Act. The Department of Internal Affairs is preparing to launch civil proceedings against the operator, which operates SkyCity casinos in Auckland, Hamilton, and Queensland.
The case, set to be filed in four days, could result in a hefty $4.9 million fine for SCML. In response, SkyCity acknowledged the proceedings and expressed its disappointment in failing to meet the necessary standards. The operator committed to cooperating with the Department of Internal Affairs and addressing any issues, emphasizing a commitment to strengthening its AML and CTF processes.
While specific details of the violations are not available, SkyCity disclosed that it had self-reported some incidents to the relevant departments. The operator’s struggles with AML compliance date back to 2021 when it launched an enhancement program to address historical deficiencies. Despite investments in technology and manpower, the company has found itself in legal trouble.
In addition to the pending civil proceedings in New Zealand, the company faces potential license suspension for 10 days or more, as revealed in a September 2023 announcement. This risk is related to a case from February 2022, though it is uncertain if it is connected to the impending civil proceedings.
Furthermore, SkyCity has set aside $29.2 million for a potential AML and CTF penalty amid AUSTRAC proceedings in Australia. The agency alleges that the company allowed 59 suspicious patrons to launder billions of Australian dollars at its property in Adelaide.
This mounting legal and financial pressure underscores the challenges SkyCity faces in ensuring compliance with AML and CTF regulations across its operations in New Zealand and Australia. As the operator faces a significant fine and potential license suspension, its efforts to address regulatory concerns have yet to prove effective.