SkyCity Faces Fine with a Fortnight to Pay

After months of speculation, it is finally official: SkyCity has confirmed that it would be paying a hefty fine of $4.16 million for its breach of obligations pertaining to anti-money laundering and terrorism financing. We have been following this story in our news blog right here, including discussing SkyCity’s plan to help stop money laundering in the future.

SkyCity Announces in Aussie Gambling Losses

Making the announcement, SkyCity told NZX that the payment of the civil penalty, which was imposed on it by the High Court, would officially bring to a close the civil proceedings that the Department of Internal Affairs had launched against it earlier.

In a statement, SkyCity CEO Jason Walbridge said, “SkyCity is aware that, as a casino operator, we have a responsibility to combat money laundering and terrorism financing. This is a responsibility we take very seriously.”

SkyCity Announces Period in Which to Pay Fine

The general manager for the DIA’s regulatory services, John Sneyd, said that the judge in charge of the case, Justice Neil Campbell, had effectively ordered SkyCity to pay the fine that it had agreed to fulfill, amounting to the officially stated value of $4.16 million.

Sneyd said in a statement that the DIA was absolutely pleased that the parties involved—SkyCity, the DIA, and the High Court—were able to arrive at a mutually acceptable number in such a quick time. He added that it was a great outcome to be able to reach the settlement without having to subject yourself to court proceedings for years.

SkyCity, in turn, stated that it would pay the fine to the Department of Internal Affairs within 15 days. SkyCity would also pay for the legal costs incurred by the DIA during this case.

The DIA initiated the action against SkyCity after it detected breaches in the casino's official anti-money laundering and countering financial terrorism (AML/CFL) responsibilities towards its players and itself.

DIA Talks of Casino Attraction for Criminals

DIA General Manager Sneyd further added that criminals may find it easy to whitewash or launder the proceeds of their crimes through casinos. He said criminal elements could pick New Zealand as a good cleaning location for their ill-gotten wealth, which was a chance that New Zealand could not afford to take.

That is why it was so important for casinos to shore up their processes and comply with set laws to guarantee their safety and ensure they were not penalized in any way.

DIA Conducts Review of SkyCity’s Compliance in 2022 and 2023

The DIA began reviewing SkyCity’s AML/CFL obligations in September 2022, which continued until December 2023. During the review, it detected specific breaches. The company finally admitted to these breaches from 2018 to 2023 this year.

The review focused primarily on the international business customers at the SkyCity casinos. While there was no evidence to indicate that SkyCity had itself been involved directly in money laundering or helped finance terrorism in any form, what emerged from the review was a story of systemic non-compliance and serious breaches.

The non-compliance and breaches were in the company’s AML/CFL obligations, risk assessment and a number of other issues like the monitoring of player accounts and transactions and ending, if required, an existing business relationship when things started getting shady.

Fine Amount Comes with a Discount

Speaking after the announcement of the fine amount, the counsel for SkyCity, Alix Boberg said that SkyCity had incorporated changes and implemented reforms in its system to stay compliant with existing regulations and laws.

According to Boberg, the fine amount could have been higher, even exceeding $5 million, but the availability of a 25% discount ensured it stayed manageable.