Crown Resort's massive fine gives some idea of what SkyCity may face over money laundering failures
A $450 million fine slapped on an Australian casino up on similar anti-money laundering charges to SkyCity gives some context to the financial impact being faced by the New Zealand casino.
Australian financial regulator Austrac took legal action against Crown Resorts over 547 perceived breaches of the nation’s anti-money laundering act.
The A$450m penalty approved earlier this month, one of the largest handed out to a casino operator globally, works out to an average of around A$800,000 per contravention that it will pay in interest-free instalments to avoid financial hardship.
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Crown cried poor during its sentencing, citing hefty fines received at a state level and a recent fully year loss in an attempt to argue for a smaller penalty.
The maximum penalty is A$22m for each breach.
By comparison, Austrac has accused SkyCity Adelaide of 124 contraventions of the act, and if a similar penalty is applied, SkyCity could face a fine of around $102m if all contraventions are upheld.
New Zealand investment firm Jarden has previously said it expected a penalty of about A$50m for NZX-listed SkyCity, based on a penalty of A$417,000 per contravention handed down to TABCorp.
At a high level, Crown’s behaviour and SkyCity Adelaide’s alleged breaches sound similar, albeit on a smaller scale.
A third casino player, Star Entertainment, is also facing proceedings for money laundering breaches.
Between 2016 and 2022, Crown failed to properly manage more than 500 high-risk customers, with money delivered to the casino in paper bags and suitcases and money being shifted between overseas junket accounts without necessary checks to ensure the money was legitimate.
It has also been accused of lying to regulators, dodging tax, and facilitating money laundering while working with criminal groups.
Austrac’s SkyCity Adelaide allegations include wet and dirty money that appeared to have been buried being exchanged for chips, suitcases of money being taken out of the casino and a patron registered as a truck driver gambling A$44 million (NZ$47m) over five years with no questions asked about the origin of the money.
It also alleged money was able to be transferred between casino accounts, bypassing the banking system and the scrutiny that comes with it.
The alleged offending has New Zealand links too, with SkyCity operating its customer accounts through Horizon Tourism, a wholly-owned subsidiary registered in New Zealand which, according to Austrac, presented a “particularly high” money laundering risk.
Horizon Tourism is directed by SkyCity chief executive Michael Ahearne and general counsel Jo Wong.
Labelled “the New Zealand channel”, Horizon's involvement included a customer transferring $1m in winnings from one of SkyCity’s New Zealand venues to another customer’s account.
The receiving customer flew from Melbourne to Adelaide, withdrew the funds in cash and returned to Melbourne.
The same customer went on to transfer another $4.7m to the same person's account.
Casinos present a money laundering risk as dirty money can be converted into a casino balance, gambled with, then cashed out as winnings, though it can involve more sophisticated techniques.
Since the alleged offending took place, SkyCity has stopped dealing with junket operators, upped the size of its AML team and promised to stamp out money laundering on its properties.
The South Australian Liquor and Gambling Commissioner has ordered SkyCity to appoint a qualified independent expert to review its suitability to hold the state’s only casino licence, and the suitability of SkyCity to continue to be a close associate of the casino.
