SkyCity Entertainment Group has announced that it has set aside AU$45 million ($29.2 million/€26.6 million) in its financial statement for the year ended 30th June 2023 in relation to an upcoming penalty from the Australian Transaction Reports and Analysis Centre (AUSTRAC).
In December of 2022, the financial crimes watchdog brought a civil legal action against the New Zealand casino operator over alleged anti-money laundering (AML) breaches at its Adelaide casino.
The breaches listed in the civil action carry maximum penalties of AU$18 million ($11.7 million/€10.7 million) and AU$22.2 million ($14.4 million/€13.1 million). However, in its announcement SkyCity noted that it’s not possible to accurately determine the final penalty it could pay as the action alleges that the casino breached laws on an “innumerable number of occasions”.
“The proceedings remain at a relatively early stage with AUSTRAC and SkyCity Adelaide currently working towards agreeing facts and potential admissions before the Court identifies a process for any remaining disputed issues and any potential penalty to be determined,” it explained.
Estimating the potential exposure to penalties with any degree of accuracy at this stage of that ongoing process remains challenging, particularly given the outcome is highly dependent on a range of factors which are not yet known.
The size of any penalty SkyCity Adelaide is exposed to could vary materially from the amount of the provision and significant uncertainties remain. Any eventual civil penalty applied to SkyCity Adelaide in relation to the proceedings may be significantly higher or lower than the provision. The timing of any civil penalty to be paid by SkyCity Adelaide is also uncertain.
SkyCity Adelaide will continue to cooperate with AUSTRAC more generally, particularly in relation to the ongoing implementation of enhancements to its Adelaide AML/CTF control frameworks.”
SkyCity also noted that the provision for the potential fine does not impact its normalized earnings for FY23. Those earnings remain within the projected forecasts of Adjusted EBITDA between NZ$300 million and NZ$310 million ($195 million/€178 million and US$201 million/€183.5 million).
Earlier this year, AUSTRAC reached an agreement with Crown Resorts for similar breaches. In that case, the operator agreed to pay AU$450 million ($292.4 million/€275.3 million) for historical AML failings.
Image credit: Michael Coghlan / CC BY-SA 2.0
Based in London, Natasha is a former sports journalist with experience working for some of the biggest athletes & brands in the world of sports and iGaming.