SkyCity is being investigated by an Australian regulator for ''potential serious non-compliance'' of counter terrorism financing and money laundering laws at its Adelaide casino.
The casino's management of ''high risk and politically exposed persons'' is under scrutiny according to Austrac, Australia's agency set up to fight criminal abuse of the financial system to protect the community from serious and organised crime.
SkyCity will make a New Zealand market announcement tomorrow but says on its website it has been informed by Austrac's regulatory operations team that it has identified potential serious breaches under the Australian Anti-Money Laundering and Counter-Terrorism Financing Act and Anti-Money Laundering and Counter-Terrorism Financing Rules Instrument.
The Auckland-based company said the potential serious non-compliance includes concerns relating to ongoing customer due diligence, and adopting and maintaining an anti money laundering and counter terrorism funding programme.
These concerns have been identified in the course of a compliance assessment which Austrac started in September 2019, focusing on SkyCity Adelaide's management of customers identified as ''high risk and politically exposed persons''.
Austrac in briefing paper released last year defines politically exposed persons as
"an individual who holds a prominent public position or function in a
government body or an international organisation".
Examples include heads of state or government, senior government officials, high-ranking members of the armed forces, board chairs, chief executives or chief financial officers in state enterprises or international organisations.
The definition also includes immediate family members and close associates of those people.
The periods under scrutiny are from July 1, 2015 to June 30, 2016 and from July 1, 2018 to June 30, 2019.
SkyCity said today the matter has been referred to Austrac's Enforcement Team, which has initiated a formal enforcement investigation into the compliance at Adelaide.
''Austrac has made clear that it has not made a decision regarding the appropriate regulatory response that it may apply to SkyCity Adelaide, including whether or not enforcement action will be taken,'' SkyCity says.
A spokeswoman said a market announcement was sent to both the ASX and NZX at the same time, but as it was a public holiday here in New Zealand today it will not be visible on the NZX until 8.30am tomorrow.
The agency has indicated that it will request information from SkyCity as part of its investigation and the company says it will fully co-operate.
''SkyCity takes its anti-money laundering responsibilities and obligations very seriously,'' it says.
The company says it has processes and practices in place in its business to detect and prevent money laundering and continually reviews these to ensure it meets all anti-money laundering requirements.
The Adelaide property is the historic Railway Station building on the banks of the River Torrens, and employs about 100 staff. It is the 10th largest employer in the South Australian city.
Besides SkyCity Adelaide, the group owns and operates casinos in Auckland, Queenstown and Hamilton.
SkyCity bought the Adelaide operation in 2000 and last year said it was spending $A330 million ($354m) on a redevelopment project.
SkyCity Entertainment Group's half-year net profit dropped 76 per cent from last year's $249.6m to $78.4m.
The fire at the NZ International Convention Centre, the Covid-19 pandemic and a settlement agreement reached with Fletcher Construction last November were all cited by the business for the profit drop.
Revenue for the half-year to December 31, 2020 fell 37 per cent to $449.9m.