SkyCity Secures Casino License Amidst Past Compliance Issues
Former Supreme Court Justice Brian Martin indicated that significant improvements to SkyCity’s operations in Adelaide did not truly begin until Jason Walbridge assumed the CEO position in 2024.
Recent developments confirm that SkyCity Entertainment Group can continue to operate its land-based casino in Adelaide. This decision follows a comprehensive review by South Australia’s gambling authority, which concluded that the company had made satisfactory enhancements to its anti-money laundering (AML) and counter-terrorism financing (CTF) measures.
Justice Martin’s independent assessment recognized that SkyCity Adelaide had previously erred in its compliance efforts. However, it also conveyed optimism that their recent adjustments have mitigated many earlier concerns.
Despite this, the report emphasized that further enhancements in AML and CTF protocols are still necessary. Nevertheless, SkyCity’s immediate operational future in Adelaide is secured with the confirmation of its license retention.
The issues stemmed from a compliance initiative launched across the industry in Australia back in September 2019. SkyCity was placed under scrutiny in June 2021, prompting the investigation led by Martin shortly thereafter.
This inquiry aligned with actions from the Australian Transaction Reports and Analysis Centre (AUSTRAC), which initiated legal proceedings against SkyCity Adelaide for deficiencies in AML compliance in late 2022. The findings from Martin’s prolonged review were recently released in a detailed report.
In his remarks, Martin stated, “Had my evaluation occurred at the end of October 2021, the suitability of both the licensee and SkyCity Entertainment Group would have been in question.” He acknowledged the evolution that has transpired since then.
He further noted, “It’s crucial to interpret past failures against the backdrop of the licensee’s evolving practices, personnel changes, and improvements in corporate governance.” Ultimately, he expressed confidence that SkyCity is now a suitable holder of its casino license.
Past Missteps of SkyCity Adelaide
AUSTRAC’s initial allegations included a recurring pattern of significant non-compliance with AML and CTF regulations. This encompassed a lack of risk-focused systems and oversight from senior management, as well as insufficient monitoring frameworks for transactions and suspicious activities.
Additionally, AUSTRAC highlighted the absence of a robust enhanced customer due diligence process for high-risk clients.
In May 2024, SkyCity reached a settlement with AUSTRAC, agreeing to a penalty of AU$67 million (approximately US$44 million). While the company had anticipated a $45 million setback, the final figure exceeded expectations.
Martin’s extensive findings, detailed in a 541-page report, pinpointed a “poor corporate culture” previously. However, he commended the proactive steps taken to address these shortcomings.
He stated that substantial shifts in culture and management practices related to AML and CTF only materialized after April 2024, coinciding with Jason Walbridge’s CEO appointment. Other notable changes included the resignation of Julie Amey as CFO and the onboarding of Andrew McPherson as the new chief information officer.
While Martin recognized ongoing progress, he expressed skepticism about whether complete remediation could realistically be achieved by June 2027, given the tasks ahead.
“Despite noble intentions, the complexity of these requirements suggests that achieving full remediation by 2027 will be challenging,” he remarked. He underscored that the transformation in culture and the strides made thus far should not be underestimated, offering hope for compliance moving forward.
As SkyCity has demonstrated its suitability to retain its license, the Adelaide casino can continue operating in the near future.
Commitment to Enhancement
In light of Martin’s conclusions, CEO Jason Walbridge has openly acknowledged past failings and conveyed the company’s determination to bolster its systems further.
“We fully recognize the report’s findings that we fell short of established standards, and we apologize for those oversights,” Walbridge stated. He confirmed that SkyCity is committed to making significant investments, including AU$60 million over three years, aimed at transforming its operational culture and enhancing its measures against financial crime.
“Our team has worked tirelessly to elevate our standards, fulfill our obligations, and improve the customer experience,” he added.
Ongoing Oversight for SkyCity
Brett Humphrey, South Australia’s Liquor and Gambling Commissioner, weighed in on the report, stating that while SkyCity can retain its license, further oversight and potential actions cannot be ruled out.
“I find that SkyCity Adelaide is suitable to hold and operate its license, and that SkyCity Entertainment Group is a suitable associate,” Humphrey remarked. However, he made it clear that this should not be interpreted as a full endorsement of SkyCity’s operations.
“Although many issues have been or are being addressed through ongoing efforts monitored independently since August 2023, the uncovered deficiencies remain a serious concern,” he noted. Humphrey indicated he would review Martin’s findings along with continued assessments to determine any necessary enforcement actions regarding these breaches.
“I’ll also explore potential measures for the future conduct of this license,” he concluded.