REPORTS SOUTH AUSTRALIA
Analysts predict SkyCity Adelaide might have to pays $50m in fines following the state and federal investigations. Issues raised include non-compliance to which the casino has reacted by implementing a dedicated compliance team. SkyCity Adelaide
THE CASINO
Alongside fellow casino operators Crown Resorts and Star Entertainment Group, SkyCity Entertainment Group is also subject to an investigation by AUSTRAC over potential series breaches to national anti-money laundering laws.
At the moment the casino is working with financial crimes watchdog AUSTRAC and a commissioner which are conducting an independent review as part of two separate ongoing investigations.
Te review has been commissioned by CBS in response to findings after inquiries into Crown and Star Entertainment. Te review is due to be completed by February 2023.
AUSTRAC apparently conducted a review of the casino back in 2016 but didn’t find any issues. However a closer look in 2019 found concerns dating back to that time.
Te casino, SkyCity Adelaide, is the only one operating in South Australia and opened back in 1985 and spans two floors of a historic Railway Station building in Adelaide on the Torrens River banks. It currently operates just over a 1,000 gaming machines, 118 table games and 138 automated table games.
In 2014 the South Australian government implemented reforms to allow SkyCity to increase the number of EGMs that can be operated from 995 to 1,500 plus 200 gaming tables and 300 automated table games. To allow for the operation of any additional EGMs the casino is required to purchase additional entitlements.
Te casino was purchased by New Zealand’s SKyCity Entertainment Group and re-branded in 2000 and underwent various refurbishments completed in 2020. It features a 120 room luxury hotel, wellness centre, gym, conference facility, bars and restaurants. Te group operates four casinos in New Zealand and the SkyCity Online Casino. Te revenue from the SkyCity Adelaide in FY22 amounted to $171.8m.
Analysts are predicting that SkyCity Adelaide might have to cough up as much as $50m in fines following the state and federal investigations. In December, Australia's financial crimes watchdog, AUSTRAC, issued civil proceedings against SkyCity Adelaide. AUSTRAC alleges serious and systemic non-compliance with anti-money- laundering and counter-terrorism financing laws
It's the third civil case brought by AUSTRAC against casinos in Australia in the last
P44 WIRE / PULSE / INSIGHT / REPORTS
two years. Issues raised include non-compliance and the casino has reacted by implementing a dedicated compliance team, increase its staff in compliance and investments in infrastructure. Te civil proceedings follows the watchdog's investigation into the casino that began in 2021, as part of AUSTRAC's industry-wide compliance campaign.
AUSTRAC's investigation identified a range of circumstances where SkyCity failed to carry out appropriate ongoing customer due diligence. AUSTRAC claims that SkyCity also failed to develop and maintain a compliant AML/CTF programme, leaving it at risk of criminal exploitation.
THE POKIES
Te pokie sector has also come under scrutiny. At the end of 2020 new restrictive laws were introduced in South Australia for pokie machines to limit the maximum amount of withdrawal at venues to $200 per day.
Previously players could withdraw up to $1,000 per day (five withdraws of $200 per day) using an Etfpos machine at the pokie venues. But with one in 10 suicides linked to gambling addiction changes have been requested. Similar $200 limits apply in ACT and Tasmania.
When the new rules came into play, some venues in regional areas where operators said it was harder for players to access cash, applied for exemptions. Some were permitted to keep withdrawal limits of between $350 and $1,000 per day per card. However these too will need to comply with the new rules.
South Australians lost almost $770m on the pokies in the last financial year, the second highest number on record. Watchdog group SABest is campaigning to have Etfpos machines withdrawn completely from gambling venues.
EGMS were introduced into South Australia in 1994 following the Gaming Machines Act 1992.
In 2019 there were just under 13,000 EGMS in clubs and hotels in South Australia. Tere is a state-wide cap of 13,081 and there are continued attempts to reduce this further.
Te CBS first quarterly report (July-September) shows a total of 12,147 EGMs by September 2022 of which the largest amount were operated by Aristocrat with 40 per cent market share followed by IGT with 27 per cent.
To operate a pokie machine in South Australia
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