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Sky City shares fall after revelation of investigation by financial regulator

Newsroom logo Newsroom 8/06/2021 Jonathan Milne
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Concerns SkyCity Adelaide breached legal obligations to manage customers identified as high risk and politically exposed.

Shares in casino operator Sky City Entertainment have fallen more than 5 percent on the New Zealand stock exchange after disclosure that it is under investigation in Australia for possible breaches of anti-money laundering rules.

Australian financial regulator Austrac yesterday said it was looking into potential serious non-compliance with the laws at Sky City's Adelaide casino.

The company said the potential breaches found included concerns relating to doing the necessary due diligence and management of "customers identified as high risk and politically exposed".

The possible shortfalls were found during an assessment conducted by Austrac in 2019, which focused on SkyCity Adelaide's management of customers identified as high risk and politically exposed, between July 2015 to June 2016 and July 2018 to June 2019.

The company said it took its responsibilities seriously and would co-operate fully with any investigation.

Sky City shares fell 6.5 percent on the Australian Stock Exchange.

Austrac's move was its latest in a crackdown on compliance with anti-money laundering rules.

It has been investigating one of Australia's biggest operators, Crown Resorts, for months and said it was also looking at the Star Entertainment Group.

Any finding of rule breaches could result in fines or restrictions on their licences.

"The Australian casino sector is at risk of criminal misuse due to the products and services they offer," Austrac chief executive Nicole Rose wrote in an editorial published in The Australian newspaper hours before the investigations into the casino operators were disclosed.

"We have an enforcement investigation under way at Crown casino that demonstrates the seriousness of our concerns. And we also have significant compliance work under way on the casino sector," Rose wrote.

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