SkyCity facing charges amid money-laundering concerns
The Department of Internal Affairs has filed charges against SkyCity Entertainment Group, its chief saying it is important criminals don’t launder money in New Zealand.
“Casinos can be an attractive way for criminals to launder proceeds of crime,” said Mike Stone, the department’s group director of anti-money laundering and 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 yesterday followed 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.
The gaming giant would engage with the department on proposed proceedings, to resolve these matters quickly and efficiently. Given the matter would be before the court, it would be inappropriate for SkyCity to comment further at this stage, SkyCity said on Monday.
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.
Stone said the department was steadfast in its commitment as a supervisor in New Zealand’s AntiMoney 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.
The alleged failures 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 was important to note that while these allegations of regulatory breaches were serious, it was not suggested SkyCity was directly involved in money laundering or the financing of terrorism, the department said.
SkyCity chief executive Michael Ahearne began an investor call on Monday by saying he would be limited in what he could say about a Department of Internal Affairs (DIA) prosecution over alleged breaches of antimoney-laundering laws.
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’ve made significant changes in and we have more work which is under way.” Marcus