SkyCity Accepts To Pay $2.54 Million To New Zealand For AML/CFT Violations

SkyCity Entertainment Group is a New Zealand and Australian gaming operator that recently entered into an agreement with NZ authorities concerning its AML/CFT and will pay a civil penalty of NZ$4.16 million ($2.54 million).

The SCML is a subsidiary of SkyCity which holds the casino operator’s license to run a casino in Hamilton, Auckland, and Queenstown.

Just a few days after settling an AU$67 million with AUSTRAC compliance breach which took place at its Adelaide casino at the beginning of this year, SkyCity Entertainment Group announced that it had also reached a civil penalty settlement with the New Zealand Department of Internal Affairs (DIA) commenced in February 2024.

Must Read: SkyCity’s Shares Fall On The Charge Of Money Laundering Against Its Casino Chain

The settlement requires SkyCity to acknowledge that it breached the New Zealand Anti-Money Laundering and Countering Financing of Terrorism Act 2009 by failing to carry out and review a compliant risk assessment, set up, implement, and maintain a compliant AML/CFT compliance program, undertake adequate account monitoring and comply with the enhanced due diligence requirements for certain customers and undertake appropriate termination of business relationships.

By a release from the DIA today, the settlement – which is the full agreement by both parties – SkyCity admitted to all five causes of action in the claim. As part of the settlement, it also admitted to paying a $4.16 million penalty for its breaches, and the court still needs to make a final decision.

The breaches occurred from 2018 to 2023 when SkyCity and the DIA jointly proposed that the High Court of New Zealand impose a civil penalty of NZ$4.16 million (US$2.54 million).

Mike Stone’s Optimistic Reviews

“This agreement is a significant result,” says Mike Stone Director of AML/CFT Group DIA.

“The outcome we were hoping for, is obtained without the need for lengthy and expensive legal actions,” he added.

“Even though it is regarded as a serious breach of regulatory rules, SkyCity willingly admitted to the breaches and accepted responsibility for the shortcomings which may be considered significant.”

“It is appreciated that SkyCity has already taken significant steps to raise its game in this area and announced its intention to focus on bettering itself further. In the event, we will continue to be involved in SkyCity future compliance from an ongoing standpoint,” he further shared.

Mr. Stone emphasizes that; “we strongly believe that the awareness that our work served to improve the integrity of the financial system of New Zealand can promote public confidence in regulations helping to prevent money laundering and terrorism financing.”

SkyCity Share Apologizes

Julian Cook, the executive chair for SkyCity expressed his acceptance of the DIA findings and even shared his apologies.

“Many of the failings have existed for long; I therefore accept and offer a sincere apology on behalf of the SkyCity Board and Management.”

“Both Australia and New Zealand have taken regulatory enforcement action against SkyCity, and those agencies are justifiably holding SkyCity responsible,” he stated.

“Some progress has also been made in the way of improving our anti-money laundering and countering terrorism financing systems in the past few years.”

He admitted SkyCity had ‘’not performed consistently with the standards that we should expect of ourselves or with the expectations set by our regulators, shareholders customers, and the communities in which we operate. ’’

“We have a mission and a strategy to meet these expectations and have started delivering the level of change expected”.

Cook added that since late 2021, ‘SkyCity had implemented a “crucial” Anti-Money Laundering and Countering Financing of Terrorism enhancement systems to align compliance systems following perceived deficiencies in the past.’

Our progressive tasks continue and we have other critical improvements which we must complete in both New Zealand and Australia to the best of our ability. SkyCity is undertaking a multi-year change program that enhances our processes to manage risk for the entire SkyCity Group, shared by media sources.

“We continue to be accountable for providing a secure and responsible platform and supporting our customers and people and will continue to work collaboratively and constructively with the regulators,” says Crook.