New Zealand’s SkyCity Entertainment Group has revised upwards its provision for a potential civil penalty to be issued by Australia’s AML watchdog AUSTRAC from AU$45 million (US$28 million) to AU$73 million (US$45 million) after revealing the two parties have reached a settlement agreement.
In a filing, SkyCity said the settlement was reached following a case management hearing on Thursday in relation to AUSTRAC allegations that the company’s Adelaide casino, SkyCity Adelaide, had breached its obligations under the Australian Anti-Money Laundering and Counter-Terrorism Financing Act (AML/CTF Act).
A court hearing in relation to the civil penalty has now been set for 7 June 2024 with SkyCity Adelaide to admit to “serious breaches” of the Act. SkyCity and AUSTRAC will then jointly propose a settlement amount.
While SkyCity did not state how much the settlement is for, it dod reveal it has revised its provision for a potential AUSTRAC civil penalty and associated legal costs to be recognized in its financial accounts for the six months to 31 December 2023 from AU$45 million to AU$73 million.
“The revised provision is an estimate of the potential exposure to penalties and legal costs associated with the AUSTRAC civil penalty proceedings following discussions with AUSTRAC,” it said.
“Notwithstanding the indication provided to the Court, the final amount of any civil penalty and associated legal costs that SkyCity Adelaide may be required to pay remains uncertain. The level of any penalty is a matter for the discretion of the Court. Any eventual civil penalty applied by the Court to SkyCity Adelaide in relation to the proceedings may be significantly different than the provision.”
AUSTRAC revealed in June 2021 that it was investigating all three of Australia’s main casino operators – Crown, Star and SkyCity – for potentially serious breaches of Anti-Money Laundering laws before subsequently launching civil penalty proceedings against all three, including SkyCity in December 2022.
The AML watchdog announced last July that it had reached an AU$450 million settlement with Crown, while proceedings against Star are ongoing.
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