The Federal Court of Australia has agreed to an agreement between SkyCity Entertainment Group and the Australian Transaction Reports and Analysis Centre (Austrac) to settle civil penalty cases.
 SkyCity FY25
 SkyCity and Austrac came to an agreement last month that SkyCity will pay a total civil penalty of AU$67.0m (£35.0m/€41.1m/US$44.7m).  This has to do with past problems with anti-money laundering (AML) and counter-terrorism financing (CTF) at its land-based casino in Adelaide. 

 At a hearing that took place earlier today (7 June), SkyCity and Austrac both made their own submissions for approval.  The court agreed to the agreed penalty fee and ordered SkyCity to pay Austrac's $3.0 million in expenses.

 Peter Soros, who is currently the acting CEO of Austrac, was happy with the decision.  He emphasised that casinos, like all enterprises, ought to take their AML duties seriously.

 Soros remarked, "Criminals will always try to use the gambling industry to clean their dirty money."  "If casinos and other gambling businesses don't have strong anti-money laundering (AML) systems and controls, they are open to being used by criminals.

 "Today's result shows that Austrac is ready to do something when businesses, like casinos, don't follow the law."  Businesses that don't follow the rules are hurting the Australian community by making it easier for criminals to get away with their crimes.

 "Money laundering is not a crime that doesn't hurt anyone.  Criminals do this to clean up their filthy money from unlawful operations that make them a lot of money, such trafficking drugs or people. They often reinvest it to fund further criminal activities and make the damage worse.

 What problems were found at SkyCity?
 The sentence is for a case that came to light in December 2022.  Austrac noted at the time that SkyCity Adelaide was "seriously and systematically not following" national AML and CTF legislation.

 But the matter goes back a few years before Austrac took action.  In September 2019, an industry-wide compliance drive began. SkyCity was told about the alleged infringement in June 2021.

 One of the main problems is that SkyCity's AML/CTF programs don't follow the rules set out in the AML/CTF Act.  Austrac also said that the business didn't do enough continuing due diligence on its customers.

 Austrac also pointed out that not following the Act for many years let high-risk customers transfer millions of dollars through the casino in ways that made it hard to tell where the money came from and who owned it.

 SkyCity also offered services to high-risk customers and through high-risk channels without the right risk-based safeguards.  Austrac pointed out that it didn't do the necessary checks on 121 clients, even though SkyCity knew that some of them were being looked at by law enforcement or that they were more likely to be involved in money laundering.

 SkyCity then recognised that its violations made it easy for criminals to take advantage of it.  It also agreed that it put both the Australian people and the banking system at danger of money laundering and terrorism financing.

 Taking care of the issues brought up by Austrac
 SkyCity has taken steps to fix the problems that were brought up in these proceedings since Austrac brought them up.  This repair work is still going on.

 So far, SkyCity has hired an outside expert to look over its AML/CTF program at the Adelaide casino and other places to find ways to make it better.  This happened in July 2021 and has caused the venue to alter.

 SkyCity then came up with an AML improvement plan for the Adelaide casino.  This takes into account the problems that were brought up in the first case against the casino.

 SkyCity Adelaide has also made a lot of changes to how it is run and added to its teams that deal with financial crime and legal and compliance issues.  The organisation also promised to put more money into internal AML and CTF resources and capabilities, as well as improve ties with law enforcement.

 Austrac keeps cracking down on people who break the rules.
 Today's settlement is the second civil penalty Austrac has won against Australian casinos.  Last year, the Federal Court fined Crown's Melbourne and Perth casinos to pay a $450 million fine for breaking the AML/CTF Act.

 Crown's agreement to take action marks the end of a process that started in 2022.  Some of the breaches found include not properly assessing the risks of money laundering and terrorism financing.

 Last July, the Federal Court said it was okay for the fine to be paid over two years.

 "Our ongoing work in this area will strongly discourage all Australian casino operators who think they can get away with not following their AML/CTF obligations," stated Soros of Austrac.

 SkyCity is also going to get in trouble in New Zealand.
 Last month, SkyCity and New Zealand's secretary of the Department of Internal Affairs (DIA) came to an agreement regarding AML/CFT violations.

 This year, the DIA said it will take SkyCity and its SkyCity Casino Management Limited (SCML) subsidiary to court.  This has to do with breaking the Anti-Money Laundering and Countering Financing of Terrorism Act of 2009.

 The operator noted that most of these violations are about things that happened in the past and were already reported to the DIA.  The operator said it had done a number of things to stop problems from happening again.

 SkyCity consented to a NZ$4.16 million fine to settle the issue with the DIA, although the court had the final say on this.

 SkyCity lowers its full-year guidance
 SkyCity has lowered its prediction on several full-year results this week because of the uncertainty surrounding regulations.  Both the underlying group EBITDA and the net profit after tax for the 2024 financial year are going to be lower than predicted.

 For the year ending June 30, underlying group EBITDA is expected to be between NZ$280 million and NZ$285 million.  This is less than the $290 million to $310 million it first said it would be.  This is a drop from the previous range of $125 million to $135 million for net profit. It is now expected to be between $120 million and $125 million.

 SkyCity is being affected by a number of things, including a tough economy that is causing customers to spend less.  The association does say, meanwhile, that visitor counts are still high at all venues.

 SkyCity also talks about how the opening of its Horizon Hotel in Auckland, New Zealand, will be pushed back even more.  It also says that the cost of casino duty in Adelaide, Australia, could go up in the 2024 financial year.

 The group claimed that some of these problems will still affect performance in the 2025 financial year.  Jason Walbridge will be the next CEO of SkyCity starting next month, and he will lead the company into the next year.  Michael Ahearne, who just departed the group, is being replaced by Walbridge.

 Julie Amey has also stepped down as chief financial officer, which is another shift at the top.  SkyCity has also hired Andrew McPherson to be the chief information officer full-time.