SkyCity Fined $2.54 Million in New Zealand for Breaches in Anti-Money Laundering Regulations

SkyCity Entertainment Group, a leading casino operator in New Zealand, has been handed a hefty fine of NZ$4.16 million (US$2.54 million) for breaching anti-money laundering and terrorism financing obligations. The High Court imposed this civil penalty on SkyCity Casino Management Limited (SCML) after the Department of Internal Affairs (DIA) brought the case forward. The company is required to pay the fine within 15 days.

SkyCity confirmed the penalty and expressed its commitment to combating financial crimes. “This brings the department’s civil proceedings to an end,” the company noted in its statement to the New Zealand Stock Exchange (NZX). Chief Executive Jason Walbridge emphasized the importance of the casino’s responsibility in addressing these issues. He was quoted as saying in a report published by the New Zealand Herald, “As a casino operator, we have a responsibility to combat money laundering and terrorism financing. This is a responsibility we take very seriously.”

The DIA initiated civil proceedings against SkyCity following a review of the company’s compliance with its Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) obligations. John Sneyd, the DIA’s General Manager of Regulatory Services, explained that the court’s decision reflects a collaborative effort to resolve the matter efficiently. “We are pleased the court, DIA, and SkyCity were able to finalize the settlement agreement promptly,” he said. “For us to achieve this without years of court proceedings and legal costs is a great outcome.”

The review, which spanned from September 2022 to December 2023, revealed that SkyCity had significant non-compliance issues, particularly concerning international business customers. This included failures in risk assessment and shortcomings in the establishment and maintenance of an AML/CFT compliance program. The review found that SkyCity did not adequately monitor accounts and transactions, nor did it terminate business relationships when necessary.

Although the breaches were serious, the court did not find evidence that SkyCity was directly involved in money laundering or financing terrorism. The High Court heard that the casino had ceased its dealings with international casinos and money remitters on behalf of clients, indicating that the company is taking steps to reform its operations. SkyCity’s counsel, Alix Boberg, outlined that these changes are part of a broader effort to address high-risk elements of the casino’s international business.

In a separate matter, SkyCity voluntarily closed its Auckland casino floor for five days earlier this month after violating its host responsibility program. This indicates a pattern of regulatory challenges for the casino operator, which has been under scrutiny for its practices in both anti-money laundering and customer safety.

The fine could have been higher, potentially exceeding $5 million, but SkyCity negotiated a 25% discount with the DIA. This discount reflects the company’s acknowledgment of its responsibilities and its efforts to rectify past compliance issues.

The DIA has been clear about the risks associated with casinos and the potential for them to become conduits for criminal activity. “Casinos can be an attractive way for criminals to launder proceeds of crime. We cannot take the risk that criminals might choose New Zealand casinos as a way of cleaning their dirty money,” Sneyd stated. He added that casinos must implement robust processes to protect against misuse.

In light of these developments, SkyCity has committed to enhancing its anti-money laundering and counter-terrorism financing systems. Walbridge reiterated this commitment, saying the company will strive to meet both regulatory obligations and community expectations.

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