SkyCity Adelaide Investigation Launched
SkyCity Entertainment Group is the latest casino operator hitting the headlines for all the wrong reasons. The New Zealand-based company faces two investigations into its SkyCity Adelaide over anti-money laundering failings. The top brass at SkyCity Adelaide is preparing for the worst and expects massive fines coming their way.
South Australia’s Office of the Liquor and Gambling Commissioner (OLGC) and Australia’s Transaction Reports and Analysis Center (AUSTRAC) are looking into possible anti-money laundering failings at SkyCity Adelaide. The casino houses more than 1,200 pokies and casino games in the second-largest of its live dealer casinos.
SkyCity Adelaide knows what to expect after recent Crown Resorts and Star Entertainment investigations. AUSTRAC first looked into SkyCity Adelaide in 2016 and found no issues. However, it took a closer look in 2019 and uncovered concerning information dating back to that time. In addition, AUSTRAC found instances of “serious non-compliance” between 2018 and 2019. Those concerns made it impossible for SkyCity to apply for a New South Wales casino licence when it looked likely Crown was losing its licence.
SkyCity Adelaide Chairman Addresses Shareholders
Recently-appointed SkyCity Adelaide Chairman Glenn Davies addressed shareholders during the company’s recent annual general meeting. Davies confirmed the casino faces two investigations. One is reviewing the casino’s compliance with anti-money laundering laws. The other focuses on deciding if SkyCity Adelaide is a suitable person to hold an Adelaide gaming licence.
“The Australian casino industry has received intense focus and is the subject of close review, all of which you’ve no doubt been reading about in the media. Our operations in Adelaide are no different; we are the subject to two inquiries. Both inquiries are very detailed, and huge amounts of information have been supplied in both cases.”
“At every step of the way, the SkyCity Group has provided full co-operation, full and complete disclosure, and has been completely open and transparent.”
Davies revealed SkyCity Adelaide is using independent experts to ensure its anti-money laundering procedures are watertight. Furthermore, the property is overhauling its casino VIP program. Davies stated he does not know when the AUSTRAC inquiry ends because it is a complex case. However, removing criminals from SkyCity properties is high on his and his team’s agenda.
“Let me be clear, whatever the outcome, SkyCity does not want criminal activity to infiltrate its properties and in no way wants to be involved with those who are seeking to launder the proceeds of criminal activity or otherwise avoid the law. The evils of money laundering are many, and we want no part of it.”
A Tough Financial Year for the Group
Potentially massive fines from AUSTRAC are not what SkyCity Group wants right now. The 2022 financial year proved tough thanks, in part, to continued COVID-19-related closures of its properties. Chief Executive Officer Michael Ahearne revealed SkyCity Auckland remained closed for 107 days. SkyCity Adelaide remained mostly open but operated in a highly restrictive environment.
Group revenue fell 32.9% to NZ$639 million ($584.3 million) as a result of reduced footfall and patrons playing far fewer roulette games and similar. The reduction in revenue ultimately led to an operating loss of NZ$33.6 million ($30.73 million). SkyCity turned a NZ$155.8 million profit ($142.48 million) in the FY2021.
The impact of the severe fire at the company’s New Zealand International Convention Centre continues to drain funds. It cost NZ$170.7 million ($156.1 million) last year and an additional NZ$63.2 million ($57.79 million) during this financial year.
However, it was not all bad news for shareholders. SkyCity’s online casino arm brought in NZ$16.9 million in revenue ($15.47 million), up an impressive 21.5%. In addition, the casino’s directors stated customer levels are returning to normal levels, and they fully expect to beat 2021’s figures, although that prediction comes without the potential $100 million AUSTRAC fine.
