Federal Court approves US$44.5m settlement between SkyCity and AUSTRAC

The Federal Court of Australia also ordered the casino operator to pay AUSTRAC’s costs.

Australia.- The Federal Court of Australia has approved the AU$67m (US$44.5m) settlement agreement stemming from civil penalty proceedings initiated by the Australian Transaction Reports and Analysis Centre (AUSTRAC) against SkyCity Adelaide for breaches of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act).

SkyCity has also been ordered to pay AUSTRAC’s legal costs amounting to AU$3m (US$2.01m). The court determined that SkyCity’s AML/CTF programs did not comply with the requirements of the AML/CTF Act, particularly in terms of customer due diligence. According to the Federal Court, these failures exposed the casino to risks of money laundering and terrorism financing, making the Australian community and financial system vulnerable to exploitation by criminals.

SkyCity acknowledged that its deficiencies allowed high-risk customers to conduct transactions worth millions of dollars from unclear sources. The casino operator provided services through high-risk channels without implementing appropriate risk-based controls and failed to perform required checks on 121 customers, some of whom were known to law enforcement or posed higher money laundering risks.

Peter Soros, AUSTRAC’s acting chief executive officer, 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 that ignore their obligations are affecting the Australian community by leaving the door open to criminal activity.

“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.”

Justice Lee’s order follows SkyCity’s admission of violations and an agreement with AUSTRAC on the appropriateness of the penalty, considering SkyCity’s cooperation during the investigation. SkyCity’s remediation efforts are still ongoing.

The case follows an AU$450m fine imposed on Crown Melbourne and Crown Perth last year.