SkyCity warns of a possible two-year battle with AUSTAC.
SkyCity Entertainment warned that the resolution of civil proceedings brought by the Australian Center for Transaction Reporting and Analysis could take one to two years.
The Auckland-based games and entertainment operator noted that the financial watchdog’s allegations, which allege serious and systemic non-compliance with Australia’s Money Laundering and Terrorist Financing Act 2006, ” are extended.
Two specific alleged violations of the law, cited by the company AUSTRAC include the SkyCity Adelaide contravened section 81 of the Act, which relates to the requirement to adopt and maintain an anti-money laundering and anti-terrorist financing program, on countless occasions beginning on December 7, 2016.
The venue is also claimed to have breached Article 36, related to the duty to exercise due diligence on customers, on 124 occasions during the period from the same date.
The company warned: “Each of the alleged contraventions mentioned above carries a maximum civil fine of between A$18 million and A$22.2 million per contravention.
“As AUSTRAC alleges that SkyCity Adelaide has breached Section 81 of the Act on countless occasions, it is not possible to determine a theoretical maximum penalty for the alleged breaches. »
Last month, an independent review of the adequacy of SkyCity Entertainment’s operations in Adelaide was put on hold pending the conclusion of these civil proceedings.
The investigation was triggered in July 2022 when the Consumer and Business Service, South Australia’s gambling regulator, cited a “number of issues raised to date” which it said highlighted “wider systemic issues within the casino industry”.
“SkyCity will continue to cooperate with our regulators and our priority remains to ensure that our compliance improvement programs meet the expectations of our regulators and are deeply embedded in the organization.” Michael AhearneCEO of SkyCity, is quoted in Inside Asian Gaming.
This comes as the company demonstrated a financial rebound for the six months ending December 31, 2022, with increases reported in all key financial metrics.
Revenue for the six-month period increased by 59.6% to NZ$462.6 million (2021: NZ$289.8 million), driven by the significant increase in games at the group’s flagship property, Auckland, which contributed 58% of the total.
Group EBITDA jumped to NZ$106.3m (2021: NZ$20.4m), with the aforementioned site contributing 71% of that total. Net profit rose to NZ$22.8 million from a loss of NZ$33.7 million a year earlier.
Ahearne added: “A positive upturn in domestic customer footfall was the main driver of performance this semester. The return of tourism to New Zealand has been a real benefit for SkyCity.
“It is fantastic to welcome international clients back to our properties. We saw the first of many cruise ships return to Auckland late last year after a two-year absence, and more are on the way.
“Sky Tower attendance in December 2022 was up six-fold compared to the corresponding period last year, which is a great result for Auckland. »