The New Zealand Department of Internal Affairs is preparing to take legal action against the SkyCity Casino Management (SCML) subsidiary of casino operator SkyCity Entertainment Group. The civil penalty proceedings will be filed in the country’s High Court on 16 February due to SCML’s alleged non-compliance with the New Zealand Anti-Money Laundering and Countering Financing of Terrorism Act 2009.
If the Department’s claim is accepted in part or in full by the High Court, SCML may be subject to a civil penalty with a maximum liability of NZ$8.0m (£3.9m/€4.5m/US$4.9m) in accordance with the Act. SCML holds the licence for operating SkyCity’s land-based casinos in Auckland, Hamilton, and Queensland.
The draft pleadings outline five separate allegations of significant compliance issues related to the Act, which mainly refer to historical matters. Some of these incidents were previously self-reported to the Department, according to SkyCity. Since late 2021, the operator has been working on an anti-money laundering and counter-terrorism financing enhancement program to address compliance systems and historical shortcomings.
SkyCity expressed disappointment over the non-compliance and committed to working with the Department to address any issues. The operator emphasized its commitment to improving processes and systems related to anti-money laundering and counter-terrorism financing.
This legal action comes after a series of challenges for SkyCity in 2023, including potential license suspension in New Zealand and legal proceedings in Australia over anti-money laundering failings. Additionally, the operator announced a decline in adjusted EBITDA for its 2024 financial year, attributing it to various factors such as reduced revenue from electronic gaming machines in New Zealand and weaker-than-expected performance in Adelaide, Australia.
These developments have raised concerns about the future earnings of the company, adding to the growing list of challenges it is facing. The pending civil penalty proceedings in New Zealand further add to the regulatory and legal issues SkyCity is currently dealing with.