International casino operator SkyCity Entertainment Group Limited has inked a deal to potentially resolve civil penalty proceedings brought by the New Zealand Department of Internal Affairs in February.

The Auckland-headquartered firm is responsible for a trio of New Zealand casinos encompassing the SkyCity Queenstown, SkyCity Hamilton and SkyCity Auckland facilities and was being investigated over historic breaches of the nation’s anti-money laundering and prevention of terrorist financing rules.

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Established Understanding

In signing the arrangement, SkyCity Entertainment Group Limited has admitted to violating the tenets of the New Zealand Anti-Money Laundering and Countering Financing of Terrorism Act 2009 several times during the 59 months from February of 2018.

This came after an official investigation by the New Zealand Department of Internal Affairs uncovered five separate instances over this period in which ‘significant’ breaches had occurred.

The settlement, which must be approved by the High Court of New Zealand, is to oblige SkyCity Entertainment Group Limited to conduct a thorough review into its anti-money laundering procedures, including all risk assessment and compliance monitoring processes. 

The casino operator is to be obliged to terminate any suspect business relationships and look into the ways in which it inspects accounts and transactions

The arrangement is to furthermore require SkyCity Entertainment Group Limited to establish, implement and maintain a fully-compliant anti-money laundering compliance program, up its enhanced customer due diligence practices and pay a fine of approximately $2.53 million. 

Corporate Confession

In an official statement, the Executive Chair for Sydney-listed SkyCity Entertainment Group Limited, Julian Cook, apologized for the historic shortcomings in New Zealand before admitting his firm had failed ‘to meet the expectations of our regulators, customers, shareholders and the communities in we are part of’.

SkyCity Entertainment Group Limited also operates the SkyCity Adelaide property in South Australia and agreed a settlement on Friday that could see it pay a penalty of around $44.72 million so as to resolve similar proceedings brought by the Australian Transaction Reports and Analysis Centre (AusTRAC) regulator.

“SkyCity Entertainment Group Limited has been subject to regulatory enforcement action in both Australia and New Zealand and those regulators are rightly holding us to account,” Cook said. 

“Over the past few years, considerable progress has been made towards upgrading our anti-money laundering and counterterrorism financing systems but this does not lessen the seriousness with which we take these breaches and we are disappointed we are in this position.”

Proactive Practices

Cook stated his company has had a ‘significant anti-money laundering and countering terrorism financing enhancement program’ in place since the end of 2021 so as ‘to address compliance systems and correct historical shortcomings’. 

The casino boss asserted that this process has seen his firm complete a ‘refresh’ of its board, recruit directors holding ‘specialist risk expertise’ and inaugurate a dedicated committee to oversee all compliance obligations.

As part of this exercise to ‘continually lift’ its anti-money laundering practices, Cook went on to assert SkyCity Entertainment Group Limited has additionally increased and enhanced its internal and external audit capabilities so as to uphold its ‘customer, community and regulatory expectations’.

“Our enhancement activities remain ongoing and we have further important work to do in New Zealand and Australia, which will take time to complete,” Cook said.

 “We have commenced a comprehensive multi-year transformation program to strengthen how we manage risk across SkyCity Entertainment Group Limited.”

Supplementary Steps

SkyCity Entertainment Group Limited earlier announced it had terminated its use of junket operators, lowered its enhanced due diligence cash thresholds and increased capacity in its risk and compliance, financial crime and host responsibility teams. 

This came after the firm committed to the implementation of card-only play in New Zealand by the end of 2025 so as to limit the ways in which customers can transact.

“We remain committed to ensuring that we provide safe and responsible experiences and environments for our people and customers and will continue to engage cooperatively and constructively with our regulators,” Cook said.