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

New Zealand’s casino operator; SkyCity Entertainment Group has faced a massive drop in its shares in nearly two months after the company said its Skycity Casino Management Ltd unit will be subject to the proposed lawsuit for allegedly violating anti-money laundering laws, reported by Reuters.

As a SkyCity subsidiary, Skycity Casino Management Ltd is authorized to operate casinos in Hamilton, Queenstown, and Auckland. SkyCity’s shares declined 2.4% to NZ$2.03 at 2209 GMT following the announcement which brings their biggest daily loss since December 19, 2023.

As per news reports, New Zealand’s Department of Internal Affairs has declared it will file the case in the High Court to impose the legal penalty of $8 million on SkyCity by the end of this week after completing an in-depth anti-money laundering audit on the casino and entertainment group.

“It is very disappointing that an organization like ours is in this position, but we are fully committed to doing whatever it takes to move forward”, said Chief Executive Michael Ahearne, quoted by media.

SkyCity announced in late 2021 that it had a program in place aimed at enhancing its compliance with the anti-money laundering/terrorism financing laws.

“The department is still working through the implications of its review and how SkyCity is in compliance”, said Mike Stone, director of the anti-money laundering division, quoted by media.

In September, the department requested the temporary suspension of SCML’s license due to the non-fulfillment of some conditions. Skycity Casino Management Ltd holds the company’s license for all the casinos located in New Zealand cities Hamilton, Auckland, and Queenstown.

Ahearne says that the company would take a positive stance on the discussions with DIA to come up with solutions rapidly.

“We endeavor to expedite handling this in the shortest possible time”, he told analysts when asked whether SkyCity will go for a settlement with the Department of Internal Affairs to avoid a full court trial.