Legal action will be initiated against SkyCity on 16th February over alleged breaches of the New Zealand Anti-Money Laundering and Countering Financing of Terrorism Act 2009 by its subsidiary, SkyCity Management Limited (SCML).
If the claims made by the department are upheld, SCML could face financial penalties as stipulated by the Act. SkyCity’s potential liability, in accordance with the Act, could amount to NZ$8.0 million (£3.9 million/€4.5 million/US$4.9 million).
In a statement, SkyCity confirmed the impending legal proceedings, attributing them to a review of SCML’s adherence to regulatory standards.
SCML holds licenses for operating SkyCity’s terrestrial casinos in Auckland, Hamilton, and Queensland.
The preliminary legal documents outline five distinct grounds for action, highlighting significant compliance deficiencies related to the Act.
Specifics of these issues have not been disclosed, although SkyCity notes they predominantly pertain to historical matters. Furthermore, some incidents were previously self-reported to the department.
Since late 2021, SkyCity has been implementing an enhancement programme to bolster anti-money laundering and counter-terrorism financing measures, aiming to rectify past inadequacies.
This initiative encompasses investments in personnel and technology, alongside comprehensive reviews of operational procedures to pinpoint areas necessitating improvement.
Expressing disappointment over the compliance lapses, SkyCity affirmed its commitment to collaborating with the department to address any identified issues promptly.
Following the initiation of legal proceedings, SkyCity pledged to engage constructively with the department to resolve the matter swiftly.
The turbulence faced by SkyCity in 2023 is compounded by ongoing regulatory challenges, including the potential suspension of its New Zealand casino licence.
Additionally, concerns linger over its operations in Australia, particularly following federal proceedings initiated by the Australian Transaction Reports and Analysis Centre.
In response to mounting pressures, SkyCity embarked on a review of its anti-money laundering and counter-terrorism financing programmes and made financial provisions to address anticipated penalties.
The departure of CEO Michael Ahearne and a revised financial outlook for FY24 underscore the challenges confronting the company, including revenue declines in New Zealand and Adelaide, Australia.