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The Federal Court of Australia has ordered SkyCity to pay a A$67m (€41m) penalty for AML/CTF failings in its Adelaide casino.

The court found SkyCity’s anti-money laundering programmes failed to meet the requirements of the 2006 AML/CTF Act and lacked appropriate ongoing customer due diligence.

It follows the country’s AML watchdog AUSTRAC launching civil proceedings against SkyCity in November 2022 for breaches of the law.

SkyCity and AUSTRAC agreed last month that A$67m would be an appropriate penalty under the circumstances.

The land-based casino operator must also pay AUTRAC’s A$3m legal costs, the court ordered.

AUSTRAC CEO Peter Soros said: “Criminals will always seek to take advantage of the gambling sector to clean their dirty money.

“If casinos and other gambling entities have weak anti-money laundering systems and controls, they leave themselves vulnerable to criminal exploitation.

“Today’s result shows AUSTRAC is prepared to take action when businesses, including casinos, fail to comply with the legislation.

“Businesses who ignore their obligations are affecting the Australian community by leaving the door open to criminal activity.”

AUSTRAC said that SkyCity admitted its AML violations made it vulnerable to criminal exploition and exposed Australia’s financial system to risk.

It added the operator’s failure to comply with the AML/CTF Act over many years allowed high-risk customers to move millions of dollars through its Adelaide casino.

This, the regulator said, was done in ways that made the source and owners of the funds unclear.

AUSTRAC also highlighted that SkyCity provided services through high-risk channels and to high-risk customers without appropriate controls.

The casino failed to carry out required checks on 121 customers, said the financial watchdog.

These included where customers were subject to law enforcement interest, or where there were signs that some posed an increased money laundering risk.

SkyCity fails to establish senior management AML framework

The regulator also criticised SkyCity for failing to establish an appropiate framework to ensure adequate board and senior management oversight of its AML/ CTF programmes.

It concluded that SkyCity has taken steps to address the issues identified in the proceedings, but remediation remains ongoing.

Soros added: “Money laundering is not a victimless crime. It happens because criminals are trying to clean their dirty money obtained by lucrative illegal activities like trafficking drugs or humans, and it is often reinvested to further criminal enterprises and amplify these harms.

“Our continued efforts in this space will act as a strong deterrent for all casino operators in Australia who think they can avoid their AML/CTF obligations.”

The penalty is the second ever secured by AUSTRAC against an Australian casino operator.

It follows the Federal Court last year ordering Crown Melbourne and Crown Perth to pay A$450m for multiple breaches of the AML/CTF Act over a two year period.

The regulator said it took into account SkyCity’s cooperation and admissions during the investigation, enabling an early resolution of the proceedings.

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