SkyCity proposes €2.3 million penalty agreement for AML/CFT breaches in New Zealand

Jenny Ortiz May 21, 2024

SiGMA news

SkyCity proposes €2.3 million penalty agreement for AML/CFT breaches in New Zealand

SkyCity Entertainment Group, a gaming operator in New Zealand and Australia, has announced a settlement with New Zealand authorities regarding breaches in anti-money laundering and countering financing of terrorism (AML/CFT) regulations. The company has consented to pay a civil penalty amounting to NZ$4.16 million (€2.3 million). However, the agreement is subject to approval by the High Court of New Zealand, with SkyCity expressing its intention to seek a prompt hearing for approval.

Recent AUSTRAC agreement and New Zealand penalty

This agreement follows closely on the heels of SkyCity’s recent accord with AUSTRAC, the Australian financial crimes watchdog, where the company agreed to pay approximately $44.5 million (€41.2 million) for similar breaches at its SkyCity Adelaide property. The NZ penalty specifically addresses deficiencies in SkyCity’s AML/CFT risk assessment and program, which remained unresolved until July 2021. These breaches, admitted by the company, span from 2018 to 2023 and primarily pertain to historical issues.

Remedial measures and future commitments

SkyCity emphasises its efforts to rectify compliance shortcomings, including the overhaul of its Board, the appointment of directors with specialised risk expertise, and the establishment of a dedicated Board Risk and Compliance Committee.

Additionally, the company has implemented higher due diligence standards, reduced cash thresholds triggering enhanced customer due diligence, and terminated relationships with junket operators since April 2021. Further, SkyCity pledges to implement a mandatory carded plan across its New Zealand properties by mid-2025.

Executive Chair’s statement and ongoing compliance initiatives

Julian Cook, SkyCity’s Executive Chair, acknowledges the progress made in enhancing AML/CFT systems while expressing disappointment over the breaches. He affirms the company’s commitment to resolving regulatory matters promptly, including the temporary suspension of its New Zealand casino operator’s license.

SkyCity remains engaged with Australian authorities for an independent review of SkyCity Adelaide, which was on hold pending AUSTRAC civil proceedings. Cook underscores ongoing enhancement efforts in both New Zealand and Australia, recognizing the ongoing importance of compliance and regulatory adherence.