SkyCity AML breaches: New Zealand High Court approves US$2.54m civil penalty

09/26/24

The company must pay the penalty within 15 working days.

New Zealand.- The Auckland High Court has approved a NZ$4.16m (US$2.54m) settlement agreement stemming from civil penalty proceedings against SkyCity Entertainment Group for breaches of the New Zealand Anti-Money Laundering and Countering Financing of Terrorism Act 2009. SkyCity has also been ordered to pay the Department of Internal Affairs’ legal costs. The civil penalty must be paid within 15 working days.

In May, the company admitted that it breached its obligations to undertake and review a risk assessment, establish, implement, and maintain a fully compliant AML/CFT compliance programme, adequately conduct account monitoring, conduct enhanced customer due diligence and terminate business relationships when required. The failures occurred between February 2018 and March 2023.

John Sneyd, general manager regulatory services, DIA, said: “We are pleased the Court, DIA and SkyCity were able to finalise the settlement agreement promptly. For us to achieve this without years of court proceedings and legal costs is a great outcome.

“Casinos can be an attractive way for criminals to launder proceeds of crime. We cannot take the risk that criminals might choose New Zealand casinos as a way of cleaning their dirty money. Casinos must have robust processes in place to protect them from misuse.

“We are satisfied that SkyCity admitted responsibility for their significant failings alongside their continued improvement to meet their AML/CFT obligations, to make sure breaches like these don’t happen again.

“DIA is steadfast in its commitment as a supervisor in New Zealand’s AML/CFT system and this result shows that if a business fails to meet its AML/CFT obligations, we will act accordingly.”

In a separate press release, Jason Walbridge, SkyCity’s chief executive officer said, “SkyCity is aware that, as a casino operator, we have a responsibility to combat money laundering and terrorism financing.

“This is a responsibility we take very seriously. We will continue to upgrade our anti-money laundering and counter-terrorism financing systems to ensure we meet both our regulatory obligations and the expectations of the communities in which we operate.”

SkyCity posts full-year net loss of US$88.23m

SkyCity posted a net loss after tax of NZ$143.3m (US$88.3m) for the fiscal year 2024 due to accounting adjustments, including an AU$86.2m (US$57.5m) impairment of the SkyCity Adelaide assets and a tax adjustment of NZ$129.6m (US$78.4m) following changes to New Zealand tax legislation.

Revenue was up 0.3 per cent year-on-year to NZ$928.5m (US$572m) while earnings before interest, tax, depreciation, and amortisation (EBITDA) fell by 16.7 per cent to NZ$138.2m (US$85.15m). The company attributed the decline to a difficult operating environment and the impact of accounting adjustments.

Auckland generated 65 per cent of revenue, followed by Adelaide (26 per cent) and Hamilton (7 per cent). Gaming revenue was down 2.9 per cent year-on-year to NZ$727.7m (US$448.34m) while online gaming revenue fell by 39.2 per cent to NZ$9.3m (US$5.73m). The casino operator recorded 7 million visitors its four sites.

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