“Casinos can be an attractive way for criminals to launder proceeds of crime,” said Mike Stone, the department’s group director of anti-money launderingand counter-terrorism financing.
“We cannot take the risk that criminals might choose New Zealand casinos as a way of cleaning their dirty money. Casinos must have robust processes in place to protect them from misuse,” he said.
The announcement today follows one from SkyCity on Monday when it announced the DIA action.
The company said then it was “disappointed” it had not met the standard to which it needed to hold itself.
“Draft pleadings have been provided to SkyCity setting out five separate causes of action. Those causes of action allege significant compliance issues in relation to the act. These are largely, although not exclusively, historical matters. Some matters relate to incidents of non-compliance which have previously been self-reported to the department,” the announcement said.
Stone said the department was steadfast in its commitment as a supervisor in New Zealand’s Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) system “and this civil proceeding, like previous actions taken by the department, shows that when a business fails to meet its AML/CFT obligations, we will take firm action”.
The department alleges SkyCity did not meet its obligations relating to its risk assessment; establishing, implementing and maintaining an AML/CFT compliance programme; monitoring accounts and transactions; conducting enhanced customer due diligence; and terminating existing business relationships.
These alleged failures variously spanned from February 2018 to March 2023, it said.
Under the AML/CFT Act, all casinos in New Zealand are required to meet a range of regulatory obligations to detect and deter money laundering and the financing of terrorism.
It is important to note that while these allegations of regulatory breaches are serious, it is not suggested SkyCity was directly involved in money laundering or the financing of terrorism, the department said.
Then he talked for more than 20 minutes, responding to questions about when the company first knew about it, what it could mean for the business, why it was happening, how it could be avoided and that it might cost $8 million.
He responded and analysts were left with little new information. The CEO, who leaves at the end of next month, was extremely guarded in his answers.
Michael Ahearne of SkyCity. Photo / Michael Craig
The casino business appears to have been taken by surprise. Justin Barratt, an analyst at CLSA Australia, asked when the company was first made aware of the proceedings. Ahearne indicated it came out of the blue.
“In relation to these proceedings, we were made aware over the weekend. We have had an audit under way for quite some time - [the] DIA has been undertaking an anti-money laundering audit,” he said.
Asked about investment in compliance and systems and if SkyCity had spent enough, Ahearne said: “Firstly, it is disappointing as an organisation that we’re in this place. We are committed to improving. We’ve made significant changes in 202, and we have more work which is under way.”
Marcus Curley of UBS asked about historical events and five separate causes of action, and for more colour about what the incidents relate to. Ahearne said he was not going to comment on the details “but they largely, but not exclusively, relate to historic[al] matters”.
Curley said gambling regulations were different in New Zealand, Victoria and New South Wales, and he wanted to know how “things” would evolve with the DIA from here.
SkyCity shares are trading today around $1.98, down 23 per cent annually.
Anne Gibson has been the Herald’s property editor for 24 years, has won many awards, written books and covered property extensively here and overseas.
