The Australian Transaction Reports and Analysis Centre (AUSTRAC) has today announced it would be filing a case against Adelaide casino, SkyCity Entertainment Group [ASX:SKC].
The crime investigator says that SkyCity has breached the law in a way that was ‘serious and systemic’, involving the facilitating of money laundering within its establishment.
These proceedings take place after a nationwide investigation which occurred in June of last year.
The SKC share price has been inching downwards since earlier this morning, sitting at around $2.52 at the time of writing.
Over the last year, shares of the gaming and entertainment stock have lapsed more than 15%:
SkyCity’s money laundering breach taken to the court
This morning (7/12/2022), the Adelaide gaming and casino operator released the news that it has been officially notified by AUSTRAC that civil penalty proceedings have been filed to the Federal Court of Australia.
The penalty was filed under the Australian Anti-Money Laundering and Counter-Terrorism Financing Act.
AUSTRAC believes Adelaide casino has shirked its legal obligations and facilitated money laundering that amounted to ‘serious and systemic’ breaches of federal law.
In June 2021, SkyCity was subject to an enforcement investigation by AUSTRAC, which was arranged to observe the casino’s compliance with the Act as part of an industry-wide investigation and compliance campaign.
Peter Soros, AUSTRAC’s deputy chief executive, reported investigations into SkyCity Adelaide revealed systemic failures in its approach to anti-money laundering and counter-terrorism financing (AML/CTF) laws.
‘AUSTRAC’s investigation identified a range of circumstances where SkyCity failed to carry out appropriate ongoing customer due diligence,’ Soros stated.
‘SkyCity also failed to develop and maintain a compliant AML/CTF program, leaving it at risk of criminal exploitation.’
If AUSTRAC’s claim is vindicated by the Federal Court, SkyCity will find itself subject to a civil penalty.
The penalty imposed by the court may be ‘material’ and yet, at the moment, SkyCity is unaware of the level of penalty AUSTRAC intends to impose.
The company stated:
‘SkyCity Adelaide places the utmost importance on compliance with its regularity obligations including its anti-money laundering compliance and will give the allegations in the AUSTRAC claim, once received, careful consideration before responding.’
Australia’s financial crime and security regulator is beginning its civil penalty proceedings against Adelaide casino in the Federal Court today.
The casino intends to cooperate with AUSTRAC regarding the civil penalty proceedings, including the enhancements of its existing AML/CTF control frameworks — which were outlined in its FY22 Annual Report.
SKC refrained from commenting further, given the matter is now before the court, and any further comments on the allegations would be ‘inappropriate’.
In the casino’s full 2022 financial year report, the company reported $639 million in revenue, $542.1 million in expenses, and $94.7 million in depreciation.
The company reported that it had been operating at a loss of $33.6 million for FY22.
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For The Daily Reckoning Australia