Shares in SkyCity Entertainment Group Ltd (ASX: SKC) were surging higher on Friday after the company got whacked with a $21 million fine for serious breaches of its Adelaide Casino licence.
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Bringing a dark chapter to an end
The fine follows a $67 million settlement in 2024 with the financial crimes regulator AUSTRAC, over the casino's contravention of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act).
AUSTRAC said in 2024 that the casino had failed to carry out the required checks on 121 customers, "including where SkyCity knew customers were the subject of law enforcement interest, or where there were indications that some posed a higher risk of money laundering''.
AUSTRAC acting Chief Executive Peter Soros said at the time:
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. 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.
The AUSTRAC process ran in parallel with an investigation by South Australia's Commissioner for Liquor and Gambling into SkyCity's suitability to hold the casino licence.
SkyCity given a to-do list
As part of the agreement announced today to the ASX, SkyCity will have to appoint a local Chief Executive, as well as an independent local board.
SkyCity will also have to phase out the use of cash for transactions greater than $4999, and there will be a prohibition on gambling junkets, which the company has already phased out.
SkyCity Chief Executive Officer Jason Wallbridge said the in-principle agreement was an important step for the company and reflected the work done over four years to improve the casino's compliance culture.
We accept the findings that led to this outcome and take seriously the obligations we have committed to. The structural changes for the Adelaide Casino – including an independent board and locally-accountable leadership – reflect a genuine commitment to operating as a responsible casino operator. We are grateful for the constructive engagement of the Commissioner's office throughout this process.
SkyCity will also have to appoint an independent compliance auditor reporting to the SkyCity Adelaide board.
SkyCity shares traded as high as 49 cents on the news before settling back to be 15.9% higher at 47.5 cents.
SkyCity is valued at $52.5 million.
