SkyCity in court over ‘$1 billion or so’ of transactions without proper anti-money laundering oversight

SkyCity is likely to face a fine exceeding $4 million for historical breaches of anti-money laundering rules at its Auckland casino. Photo / Peter Meecham

SkyCity will likely face a $4.16 million fine for breaching anti-money laundering and terrorism financing obligations after about a billion dollars changed hands without proper oversight.

The High Court at Auckland today heard that SkyCity Casino Management (SCML) had stopped dealing with international casinos or money remitters on behalf of clients.

The casino’s counsel Alix Boberg said these changes were part of a series of reforms tackling high-risk aspects of the casino’s international business.

SCML earlier this year admitted breaches spanning from 2018 to 2023, which related to largely historical matters.

“It fully accepts these were serious and long-term failures and they did affect a significant volume of transactional activity,” Boberg told Justice Neil Campbell.

The Auckland casino operator could have faced a fine exceeding $5m but Boberg said it and the Department of Internal Affairs agreed that a 25% discount was available.

The discount and credit was for full co-operation with the investigation.

“Those failures were not intentional or deliberate failures,” Boberg told the pecuniary penalty hearing.

Internal Affairs and SkyCity largely agreed on the nature and severity of the breaches.

The court heard that a remarkable aspect of the case was the huge volume of transactions carried out without proper oversight.

Boberg said that since the scandal, SkyCity had greatly bolstered its anti-money laundering team.

The proposed agreed penalties were in the 75-80% range of the maximum possible penalty, she said.

SkyCity is likely to face a fine exceeding $4 million for historical breaches of anti-money laundering rules at its Auckland casino. Photo / Dean Purcell

Boberg said SkyCity acknowledged the failures were serious.

“And in some cases its non-compliance was long-term.”

But she said there was no intentional non-compliance.

Boberg said the casino had been subject to regular reviews and on-site inspections from regulators.

“They concluded that SkyCity’s processes had an overall high level of compliance.”

Internal Affairs counsel Sam McMullan said there was no suggestion SkyCity had wholly disregarded its responsibilities.

But he said “$1 billion or so” of transactions went through without adequate oversight.

McMullan said Internal Affairs had engaged with SkyCity over time on related non-compliance issues, “all of which weren’t remedied”.

Justice Campbell said he would issue his judgment later, probably in three to four weeks’ time.

The Auckland casino shuts next week from the start of Monday to the end of Friday, as punishment for a separate issue relating to breaching its host responsibility programme.

The company said it would roll out a “no card, no play” system next year as part of responsible gambling reforms.

John Weekes, online business editor, has covered rounds including consumer affairs, crime, court and politics for the Herald, Herald on Sunday, Stuff and News Corp Australia.