SkyCity granted licence for casino operation, overlooking previous lapses
SkyCity Adelaide's casino licence has been retained and considered suitable, following an independent review by retired Supreme Court Judge Brian Martin AO KC, commissioned by South Australia's Liquor and Gambling Commissioner. The review found significant past failings in SkyCity Adelaide's management, particularly related to governance, anti-money laundering and counter-terrorism financing (AML/CFT) controls, and host responsibility.
However, the review concluded that due to substantial improvements, changes in personnel, and a stronger corporate culture, SkyCity Adelaide and its parent, SkyCity Entertainment Group, are now suitable to hold and operate the casino licence.
This change in status came after AUSTRAC's civil penalty action, in which SkyCity agreed to pay a $67 million civil penalty plus $3 million in costs for breaching AML/CFT laws. The review and penalty reflect the seriousness of the regulatory issues but recognize SkyCity’s commitment to remediate those shortcomings.
For ongoing operation, SkyCity must address several conditions. These include addressing deficiencies in governance, AML/CFT processes, and responsible gambling measures. The operator is also required to implement its multi-year "Building a Better Business" (B3) program, which involves about $60 million investment over three years to enhance compliance, reduce gambling harm, and foster a responsible corporate culture.
The Liquor and Gambling Commissioner and Consumer and Business Services will continue to closely monitor compliance, and may take enforcement actions if standards are not maintained. The independent monitoring by Kroll Australia of SkyCity Adelaide's AML/CTF and harm minimisation programme has been ongoing since 2023.
Martin, the independent reviewer, reported positive progress in all areas since mid-2024 at SkyCity Adelaide. However, he expressed doubt about SkyCity's target of completing remediation by 30 June 2027 due to the magnitude and complexity of the tasks.
The licence for SkyCity Adelaide will remain under close scrutiny, with ongoing progress not to be underestimated. Martin warned that the regulatory assessment could change if cultural improvements stall or financial constraints undermine remediation.
The report found that SkyCity Adelaide can continue running the North Terrace venue under independent monitoring by Kroll Australia. The operator, SkyCity Adelaide, will continue running the North Terrace venue under the current monitorship and leadership.
AUSTRAC's proceedings resulted in SkyCity admitting numerous breaches of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006. The board of SkyCity was also found to have failed to exercise its basic governance powers.
Despite the past failings, Martin stated that continuing suitability for SkyCity Adelaide is conditional on maintaining the new culture, resolving outstanding compliance issues, and addressing potential financial risks. Martin determined that SkyCity Adelaide is a suitable person to hold the licence and operate the casino, and that SkyCity Entertainment Group, SkyCity Adelaide's parent company, is suitable to remain a close associate licensee.
In conclusion, SkyCity Adelaide’s casino licence is active and the operator is recognized as suitable, conditional on significant improvements and ongoing compliance with regulatory and governance standards following previous failings and AUSTRAC’s civil penalty.
- The retention of SkyCity Adelaide's casino licence is subject to ongoing compliance with regulatory and governance standards, as determined by the independent review by Brian Martin AO KC.
- The operator, SkyCity Adelaide, will continue to undergo monitoring by Kroll Australia for AML/CTF and harm minimization, as agreed upon since 2023.
- SkyCity Adelaide has made substantial improvements, changes in personnel, and displayed a stronger corporate culture, which have been recognized as suitable for holding and operating the casino licence, despite past significant failings.
- Ongoing remediation at SkyCity Adelaide is a condition for continued suitability, encompassing deficiencies in governance, AML/CFT processes, responsible gambling measures, and potential financial risks.
- The Building a Better Business (B3) program, involving a $60 million investment over three years, is critical to enhancing compliance, reducing gambling harm, and fostering a responsible corporate culture.
- The licence for SkyCity Adelaide's North Terrace venue remains under close scrutiny, with regulators warning that the regulatory assessment could change if cultural improvements stall or financial constraints undermine remediation efforts.
