Gaming regulator the Department of Internal Affairs plans to prosecute NZX-listed SkyCity Entertainment Group and SkyCity Casino Management, which holds the licences for the Auckland, Hamilton and Queenstown operations.
The action due to be filed in court this Friday, revealed in ASX and NZ market filings by SkyCity, is for allegations the company breached the Anti-Money Laundering and Countering Financing of Terrorism Act.
An investor conference call is planned for 11am today, when management would speak about the announcement.
The company said today it was “disappointed” it had not met the standard to which it needed to hold itself.
The gaming giant would engage with the department on proposed proceedings, to resolve these matters expeditiously.
Given that the matter will be before the court, it would be inappropriate for SkyCity to comment further at this stage, it said.
The move follows a review of SkyCity Management’s compliance with the act.
“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.
Since late 2021, SkyCity had changed to address compliance systems and correct historical shortcomings.
“This has involved, and continues to involve, significant investment in people and technology, and various reviews of SkyCity’s processes and systems to identify areas which require improvement,” it said.
“In the event the department’s claim was to be accepted in whole or in part by the High Court, SkyCity Casino Management would be subject to a civil penalty to be imposed by the court as set out in subpart 3 of the act. Under the act and relevant case law, SkyCity and the department assess SkyCity’s maximum liability in relation to these claims as being $8 million in aggregate.
“SkyCity is committed to continuing to uplift its processes and systems, particularly with respect to AML/CFT and host responsibility matters,” it said.
On September 9, the company said the department had applied to temporarily suspend SkyCity’s license in New Zealand. That followed a complaint in February 2022.
A former customer gambled at the SkyCity Auckland casino from August 2017 to February 2021.
The department secretary said SkyCity Casino Management did not comply with requirements in its Auckland host responsibility programme relating to detection of incidences of continuous play by the customer.
The Herald reported how those threats last September had spooked investors, with a bombshell announcement wiping a quarter of a billion dollars off the company’s market value.
A SkyCity spokesman then said the company disclosed to the market information about this and without delay as per NZX rules.
“We didn’t know about the DIA’s application at the time of the annual results,” the spokesman said of Internal Affairs’ actions.
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.