Austrac, an AML authority, files a federal lawsuit against SkyCity.

Austrac, an AML authority, files a federal lawsuit against SkyCity.

 A federal court case has been filed against SkyCity Adelaide for anti-money laundering violations by the government-run financial intelligence organisation, the Australian Transaction Reports and Analysis Centre (Austrac).
 According to AUSTRAC Austrac, the land-based casino operator had a history of "serious and systemic non-compliance" with the nation's laws pertaining to counterterrorism financing (CTF) and anti-money laundering (AML).

 Following an inquiry of the New Zealand-based company, of which SkyCity was informed in June 2021, the civil penalty proceedings have begun.  In September 2019, an industry-wide compliance drive was launched, which resulted in the probe.

 In September 2019, AUSTRAC Austrac launched an industry-wide campaign to combat non-compliance with the AMLF/CTF laws.
 According to Peter Soros, the deputy CEO of the agency, the company has witnessed numerous institutional shortcomings in its handling of its AML/CTF responsibilities.

 "A number of situations where SkyCity failed to perform appropriate ongoing customer due diligence were found by Austrac's investigation," he said.  "SkyCity also put itself at risk of criminal exploitation by failing to create and maintain a compliant AML/CTF program."

 Although SkyCity acknowledged that it was aware of the situation, it would not comment beyond stating the precise details of the prosecution's case.

 "It would be inappropriate for the company to comment further on the allegations at this time, given that the matter will be before the court."

 Failures of CTF and AML
 Austrac said that SkyCity had not properly evaluated the risks it faced from terrorism financing and money laundering.  Additionally, the operator did not provide a suitable structure for board and senior management oversight of these projects, nor did it include risk-based systems and controls into its AML and CTF programs.

 A "transaction monitoring program to monitor transactions and identify suspicious activity that was appropriately risk-based or appropriate to the nature, size, and complexity of SkyCity" was also not established by the company.

 There was also no "suitable enhanced customer due diligence program to carry out additional checks on higher risk customers," according to Austrac.

 In the end, Soros claimed that the company was exposed to criminal exploitation due to the identified shortcomings.

 "All businesses regulated by Austrac should take seriously the requirement that regulated entities have appropriate AML/CTF controls and systems in place, as it is not optional," he stated.

 "Austrac is still collaborating with SkyCity to make sure it fulfils its responsibilities under the AML/CTF Act and will do so going forward.

 "This 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, as this is the third civil penalty proceeding Austrac has brought against businesses operating in the casino sector."

 broader Austrac crackdown
 The most recent gaming business with an Australian presence to face enforcement action from the financial intelligence agency is SkyCity.

 Due to AML violations, Austrac filed a civil lawsuit against Crown Resorts, a casino operator, in March.  The agency also filed a lawsuit against Star Entertainment Group in federal court in November.  Neither case has been resolved yet.

 Due to their involvement in numerous anti-money laundering and social responsibility lapses, both land-based operators were the focus of independent parliamentary investigations.

 Citing concerns about AML and CTF, the agency opened an enforcement inquiry into Entain's operations in September following a "extensive supervisory campaign."