The latest money laundering allegations faced by SkyCity in Australia could imply that the much bigger operations of the gambling company in its home market of New Zealand could be involved in the wrongdoings, too.
As Casino Guardian recently reported, the beginning of December 2022 saw the Australian Transaction Reports and Analysis Centre (AUSTRAC) table allegations that billions of dollars were laundered through the Adelaide casino of SkyCity in a total of 124 breaches of the country’s Anti-Money Laundering and Counter-Terrorism Financing Act.
The charges laid in the Australian Federal Court by the financial watchdog of the country implied that the dirty money was exchanged for casino chips, with suitcases full of money taken out of SkyCity Adelaide and a casino patron registered as a truck driver gambled away about AU$44 million in five years, with the casino asking absolutely no questions about the origin of the money. Furthermore, the AUSTRAC also alleged that the casino operator facilitated the transfer of the washed money between casino accounts, circumventing the banking system and all regulatory oversight that usually comes with it.
Each of the violations holds a maximum penalty worth AU$22.2 million, which is a serious amount for a company whose market value is about AU$2 billion, but market and legal experts do not believe the company would face the total penalty. In a previous case involving the TAB operator in Australia – Tabcorp – the company faced a fine of about AU$417,000 per violation. Investment firm Jarden has unveiled expectations for a monetary penalty amounting to approximately $50 million.
Department of Internal Affairs Claims There is Evidence That SkyCity Breached Gambling Laws
The general manager of regulatory services at the Department of Internal Affairs (DIA), Caroline BridglandHill, has explained that any law enforcement or recommendation for such enforcement made to the country’s Gambling Commissioner would have to be based on evidence obtained in relation to the company’s casino licence in New Zealand.
The DIA started its annual review of the Auckland, Queenstown, and Hamilton properties of SkyCity in September 2022.
Things could seem pretty straightforward – SkyCity is facing troubles in Australia and some may think the issues would be isolated but the situation may not be as easy. In case the aforementioned accusations of the regulatory body against the company’s operations in New Zealand are proven, the company’s entire business may be in danger.
According to claims unveiled by AUSTRAC, SkyCity operated its customer accounts through a wholly-owned subsidiary registered in New Zealand, which is called Horizon Tourism. The subsidiary is headed by Michael Ahearne, CEO of SkyCity, and general counsel Jo Wong. Australia’s financial watchdog claims that the aforementioned unit of the company presented a particularly high risk of money laundering.
Representatives of the Australian Transaction Reports and Analysis Centre have labelled Horizon Tourism “the New Zealand channel” and claimed that the business was involved in unwanted practices, such as a customer transferring winnings of about $1 million from an account in one New Zealand venue of SkyCity to another customer’s account. An investigation into the unit’s operations found that the receiving customer travelled from Melbourne to Adelaide, withdrew the funds in cash, and flew back to Melbourne. The same customer was also involved in transferring another $4.7 million to the same person’s account.
Ms Caroline BridglandHill explained that in case one reporting entity was knowingly and willingly enabling money laundering during the course of its operation, it would be in breach of the obligations under the Anti-Money Laundering and Counter-Terrorism Financing Act. Anti-money laundering obligations also include the evaluation of money laundering and maintaining a special activity management and mitigation policy. Apart from that, all operators are required to stick to customer due diligence and potentially suspicious transactions.
SkyCity’s Alleged Legislation Breaches Puts the Company’s Reputation and Operating Permits at Stake
As Casino Guardian reported earlier, the liquor and gambling regulatory body’s member Dini Soulio in July rolled out an investigation into whether SkyCity was still considered fit to hold an operating casino permit in the state. The probe follows similar investigations involving two Australian gambling giants that were rolled out to check whether Crown Resorts was unsuitable to hold licences in the states of Victoria, New South Wales (NSW) and Western Australia and whether Star Entertainment was unfit to operate its casino licenses in the states of NSW and Queensland.
Still, the review and investigation into SkyCity’s operations are not exactly the same as the probes into the two Australian gambling and casino giants, with the findings set to be revealed by the financial watchdog after the court case filed by the regulatory body comes to an end. Brian Martin KC, who investigates the New Zealand gambling company’s business, is set to report back to Dini Soulio in February 2023.
According to the investment firm Forsyth Barr, Soulio’s review of the operator would be more focused on the ongoing behaviour and processes happening in the operator’s business rather than past violations of federal and state gambling laws.
Reportedly, since the alleged gambling laws violations took place, SkyCity ceased its collaboration with junket operators (also known as junkets), increased the size of its anti-money laundering team and pledged that it would put an end to money laundering on its properties.
The casino act in South Australia takes into consideration the business awareness and experience of companies, along with their reputation and a bunch of other matters whenever a commissioner contemplates whether a business is worthy of holding an operating permit.
The suitability for holding a casino licence in New Zealand is currently controlled by the Gambling Act of 2003. Under the provisions of its operating permit, SkyCity’s licence for its Auckland casino is set to expire in 2048. As previously reported by Casino Guardian, suitability requirements under the country’s gambling act take into account the applicant’s honesty, including some previous disciplinary action against the operator.
Of course, being unfit to hold a casino licence did not immediately prevent other operators in Australia, such as Crown Resorts and Star Entertainment, from operating and offering their services, although both of them faced hefty monetary penalties. However, the finding had serious consequences for the two companies’ businesses because it meant a range of changes in the corporate structure, policies, and internal oversight.
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Olivia Cole
