In what is anticipated as a substantial penalty, SkyCity Entertainment, a significant player in the casino and hospitality industry, has earmarked AUD 45 million (roughly USD 29.24 million as per current conversions). The company, having recently violated the regulations surrounding anti-money laundering (AML) and countering the financing of terrorism (CFT), is clocking its finances to foot the impending fine.
At this point, SkyCity has acknowledged uncertainty relating to the scale of the prospective penalty as the AUSTRAC investigation continues. The $45 million allocation appears to reflect a worst-case scenario, projecting a potential situation where each contravention could lead to an ultimate civil penalty of $18 – $22.2 million (USD 11.7 – 14.4 million).
The magnate in casino & hospitality has further stated that it is unsure of the timeline of when the penalty could be imposed. Explaining that the magnitude and timing of the impending fine hang on a variety of factors, SkyCity underlines that the court aims to grasp the complete context of the infringements prior to determining an appropriate sanction.
SkyCity in the Crosshairs over Regulatory Violations
Towards the tail-end of 2022, in December to be precise, AUSTRAC initiated civil penalty proceedings against SkyCity. The company stands accused of critical AML and CTF transgressions. The financial investigative body suggests that SkyCity accommodated 59 dubious clients, allowing them to launder billions of Australian dollars at the Adelaide property.
These court proceedings were consequent to a preliminary inquiry that scrutinised SkyCity’s business activities, inviting inputs from concerned stakeholders.
In a significant development in May, SkyCity saw the necessity to engage an independent reviewer to analyse their AML and CTF policies. This step was imminent after the preceding review had to be suspended owing to the ongoing legal proceedings.
Depending on the eventual outcome, it could be a possibility that SkyCity fails to qualify for holding a casino license.
SkyCity Foresees Stability in Its Metrics
Meanwhile, SkyCity has publicised a $45.6 million (USD 29.6 million) write-down attributable to the Adelaide casino license.
SkyCity also conveyed its anticipation of the ongoing developments not having any knock-on effect on the year’s earnings. Moreover, the company projects its adjusted EBITDA levels to maintain steadiness, hovering around $276.6-$285.4 million (approximately USD 165.5-$170.8 million).
In a related development, Star Entertainment Group, embroiled in similar proceedings, managed to secure a tax relief agreement in New South Wales. Although it implies increased payout over an extended period, this arrangement facilitates the company to stabilize its finances amidst legal predicaments.
