The Australian Transaction Reports and Analysis Centre (Austrac) has initiated civil penalty proceedings against SkyCity, a New Zealand-based land-based casino operator. The action comes as a result of an investigation that found SkyCity to have demonstrated a pattern of “serious and systemic non-compliance” with Australia’s anti-money laundering (AML) and counter-terrorism financing (CTF) laws. Austrac’s scrutiny of the gambling industry is part of its industry-wide crackdown on AML/CTF violations, which commenced in September 2019. The enforcement actions against SkyCity highlight the importance of robust AML/CTF programs and compliance measures in preventing criminal exploitation.
Institutional Failings and AML/CTF Obligations:
Austrac’s investigation revealed numerous institutional failings in SkyCity’s approach to its AML/CTF obligations. The agency emphasized that SkyCity failed to carry out appropriate ongoing customer due diligence and neglected to develop and maintain a compliant AML/CTF program, leaving the company vulnerable to criminal exploitation. Peter Soros, Deputy CEO of Austrac, highlighted the importance of regulated entities having robust AML/CTF controls and systems in place, stressing that compliance with AML/CTF obligations is not optional.
Specific AML/CTF Failures:
Austrac identified several key areas where SkyCity fell short in its AML/CTF practices. The operator failed to appropriately assess money laundering and terrorism financing risks, lacked risk-based systems and controls in its AML/CTF programs, and lacked a proper framework for board and senior management oversight. Austrac also noted the absence of a transaction monitoring program to identify suspicious activity, inadequate enhanced customer due diligence for higher-risk customers, and insufficient measures to monitor transactions appropriately. These deficiencies left SkyCity exposed to potential criminal exploitation.
Austrac’s Ongoing Collaboration and Wider Implications:
Austrac continues to work with SkyCity to ensure compliance with AML/CTF obligations and to secure future adherence to regulations. The agency’s enforcement actions against SkyCity serve as a warning to all businesses regulated by Austrac, including casinos, to take their AML/CTF obligations seriously and comply with the AML/CTF Act and Rules. The case against SkyCity follows similar civil penalty proceedings initiated by Austrac against other casino operators, including Crown Resorts and Star Entertainment Group. These actions underline the agency’s commitment to combatting money laundering and reinforcing compliance within the gambling sector.
Industry-Wide Crackdown and Regulatory Inquiries:
Austrac’s investigation into SkyCity is part of its broader industry-wide crackdown on AML/CTF non-compliance. In addition to SkyCity, Austrac has launched civil proceedings against Crown Resorts and Star Entertainment Group, both of which are undergoing separate parliamentary inquiries related to AML failings and social responsibility issues. The agency’s enforcement investigation into Entain’s activities further demonstrates its commitment to addressing AML/CTF concerns within the Australian gambling industry.
SkyCity’s civil penalty proceedings initiated by Austrac highlight the significant non-compliance with AML/CTF obligations within the land-based casino sector. The findings emphasize the need for robust AML/CTF controls, comprehensive risk assessments, and effective transaction monitoring programs to prevent criminal exploitation. Austrac’s actions serve as a stern reminder to all businesses regulated by the agency to prioritize and adhere to their AML/CTF obligations, ultimately safeguarding the integrity of the financial system and protecting against illicit activities.