SkyCity Entertainment Group recently reached a NZ$4.16 million settlement with New Zealand’s Department of Internal Affairs (DIA) to resolve civil penalty proceedings stemming from breaches of anti-money laundering (AML) obligations. This agreement mirrors a previous AU$67 million deal with Australian regulators.
Overview of Settlement Agreements:
Both in Australia and New Zealand, SkyCity faced regulatory action due to AML failures. The agreements require SkyCity to pay substantial penalties and acknowledge its breaches of AML/CFT regulations. These breaches occurred between 2018 and 2023, indicating systemic issues over several years.
Admission of Breaches:
SkyCity admits to various breaches, including failure to conduct adequate risk assessments, implement compliant AML/CFT programs, monitor accounts effectively, conduct enhanced due diligence, and terminate high-risk relationships when necessary. This admission underscores the gravity of the situation and acknowledges the need for substantial improvements in compliance measures.
Financial Penalties:
The agreed civil pecuniary penalties of NZ$4.16 million send a clear message about the seriousness of the breaches. While this amount may seem substantial, it reflects the scale of non-compliance and emphasizes the importance of robust AML/CFT protocols.
Regulatory Oversight and Accountability:
Regulators in both countries are holding SkyCity accountable for its AML shortcomings. These actions highlight the crucial role regulators play in ensuring compliance within the gambling industry and the broader financial sector.
SkyCity’s Response and Accountability:
SkyCity’s Executive Chair, Julian Cook, expressed regret over the breaches and emphasized the company’s commitment to rectifying its deficiencies. Acknowledging the failures and apologizing demonstrates accountability and a willingness to address past shortcomings.
Commitment to Change:
Cook’s statement underscores SkyCity’s commitment to enhancing its AML/CFT systems. While progress has been made, there is a recognition that more substantial changes are necessary to meet regulatory expectations and regain trust from stakeholders.
Industry Impact and Lessons Learned:
The regulatory actions against SkyCity serve as a cautionary tale for the gambling industry. They highlight the importance of robust AML/CFT measures and the severe consequences of non-compliance. Other operators must heed these lessons and prioritize compliance to avoid similar repercussions.
Future Outlook:
Moving forward, SkyCity must implement comprehensive reforms to ensure full compliance with AML/CFT regulations. This includes investing in technology, training, and internal controls to detect and prevent illicit financial activities effectively.
The settlements between SkyCity and regulators in Australia and New Zealand mark a significant chapter in the company’s compliance journey. While the penalties are substantial, they provide an opportunity for SkyCity to enact meaningful change and rebuild trust with stakeholders. By addressing its AML/CFT shortcomings head-on, SkyCity can emerge as a stronger and more responsible player in the gambling industry.