Australian Transaction Reports and Analysis Centre (AUSTRAC), the Australian Government’s agency, which detects and thwarts criminal activities in connection with the financial system, is cracking down on yet another Australian casino for breaching the laws on anti-money laundering and counter-terrorism financing.
AUSTRAC Files Penalty Proceedings Against SkyCity Adelaide
On December 7, AUSTRAC announced that it has filed a penalty lawsuit with the Federal Court against South Australia’s casino SkyCity Adelaide, which is operated by SkyCity Entertainment Group.
Following a massive investigation conducted by AUSTRAC, which encompasses various stakeholders across the gambling industry in Australia, AUSTRAC identified serious violations in terms of SkyCity Adelaide’s compliance with Australia’s anti-money laundering and counter-terrorism financing legislation.
Peter Soros, Deputy CEO of AUSTRAC, elaborated on the findings from the investigation: “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.”
Soros further explained that these deficiencies are making SkyCity Adelaide an easy target for criminal activities.
Soros also noted that the legislative requirements on AML/CTF are not to be taken lightly and are mandatory, not voluntary.
The penalty proceedings against SkyCity Adelaide are the third, which AUSTRAC submits against gambling operators this year in connection with AML/CTF violations.
Only a week ago the regulator filed a penalty lawsuit against Star Entertainment. In March, ASUTRAC filed similar case against Crown Resorts.
AUSTRAC warned that other companies in the gambling sector should take heed of these cases and make sure that they are fully compliant with AML/CTF requirements and are fulfilling their obligations stipulated in the law.
AUSTRAC did not disclose any further details on the case against SkyCity Adelaide but has noted that all court documents will be publicly available once the court proceedings commence.
AUSTRAC’s Allegations against SkyCity Include Various Violations
AUSTRAC has found extensive discrepancies in connection with SkyCity Adelaide’s AML/CTF obligations.
For example, SkyCity Adelaide has not introduced an appropriate system for managing risks associated with AML/CTF. The company has also failed to determine its own risk exposure associated with AML/CTF and how to handle and diminish that exposure.
Furthermore, SkyCity Adelaide has not put in place a scheme that can help the company’s senior executives oversee AML/CTF systems.
Further discrepancies included the lack of an appropriate system to control and monitor all financial transactions for any irregular or dubious activities.
Additionally, AUSTRAC’s investigation revealed that SkyCity Adelaide has not been performing proper due diligence checks on high-risk customers and generally did not have a program for due diligence customer checks that is complex enough for the scale of the company’s customer base and activities.