SkyCity Adelaide inquiry on hold amid AUSTRAC lawsuit
While a federal investigation is ongoing, South Australia’s inquiry into SkyCity Adelaide and its suitability to hold a casino licence has been put on hold.
Since mid-2022, the Adelaide casino has been subject to an investigation led by former South Australian court judge Brain Martin KC. Like several other casino operators in Australia, SkyCity is suspected of failing to enforce anti money laundering (AML) protocols and thus enabling organised crime.
Martin’s inquiry was ordered on July 1, 2022, by Dini Soulio, the Liquor and Gambling Commissioner, and was to be submitted on February 1, 2023. Soulio pushed for the investigation after similar inquiries were conducted interstate and several major regulatory failures were discovered in the gaming industry.
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The commissioner revealed late Monday night that Martin had passed on his findings from the investigation. However, the “preliminary materials” from the inquiry were somewhat complicated after SkyCity Adelaide was accused of “serious and systemic” non-compliance with AML laws by AUSTRAC, Australia’s financial crime watchdog.
In a statement, Soulio revealed that there had been some overlapping between Martin’s inquiry and that done by AUSTRAC despite them conducting separate investigations. The commissioner added that Martin had informed him that determining SkyCity Adelaide’s gaming licence suitability could not be done “reliably”, at least until the operator resolved its ongoing Federal Court proceedings with AUSTRAC.
“While Mr Martin’s investigation has been separate from the proceedings initiated by AUSTRAC in the Federal Court against SkyCity, there is clearly some overlap that will need to be considered,” he disclosed.
“Mr Martin has advised that until the resolution of the AUSTRAC proceedings, it is not possible to determine reliably the question of suitability.”
“On that basis, I have put on hold the investigation with regard to an overall determination of suitability.”
The commissioner further disclosed that he had written to SkyCity Adelaide concerning the preliminary matters raised by Martin’s report and AUSTRAC’s accusations. He had, however, not reached a decision concerning the potential action against the casino operator and declined to comment further. Soulio promised to share information with the public as soon as possible.
SkyCity Entertainment Group, the New Zealand parent company of SkyCity Adelaide, released a statement acknowledging Soulio’s decision. The company revealed that, in the face of the delays, SkyCity Adelaide would continue to hold a “constructive dialogue” with Soulio and implement the required AML responsibilities.
“SkyCity Adelaide continues a constructive dialogue with the commissioner. SkyCity and SkyCity Adelaide will continue to cooperate with Consumer and Business Services and any further requests for information and documents,” announced the casino operator.
“SkyCity Adelaide continues to implement its AML and host responsibility programmes to uplift its AML and host responsibility processes and practices at the SkyCity Adelaide casino.
“This has been a key priority for the business and will remain so.”
In its 800-page statement of claim submitted to the Federal Court, AUSTRAC listed several allegations accusing SkyCity Adelaide of violating the Anti-Money Laundering and Counter-Terrorism Financing Act 2006. Per the claim, the gaming operator’s breach of Section 81 of the Act was too much to quantify. The section of the Act highlighted the requirement for a program on anti money laundering and counter terrorism financing (AML/CTF).
AUSTRAC also claimed that SkyCity Adelaide was responsible for 124 violations of the Act’s Section 36, which mandates that gaming operators carry out patron due diligence for risks of AML/CTF.
The Australian watchdog accused SkyCity Adelaide of attending to 59 “high ML/TF (money laundering/terrorism financing)” customers. The customers alone reportedly generated $74 million in losses for the casino operator.
AUSTRAC’s claim further states that several of the patrons were involved in massive cash transactions using money that were in “plastic bags, garbage bags, cash bundled together with rubber bands or irregular straps”. The cash used also seemed dirty and was suspected of having been buried previously.
A day before Martin’s report was due, Premier Peter Malinauskas revealed that the state government intended to make any changes necessary to operations at SkyCity Adelaide.
