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Gavin Harper
by Gavin Harper
SkyCity Casino, Adelaide Faces Stiff Penalties Under New SA Laws

In a significant move to tighten regulations on gambling establishments, the South Australian government is pushing for legislative changes that could see SkyCity Casino face penalties of up to $75 million. The proposed amendments aim to grant the SA Liquor and Gambling Commissioner enhanced authority to impose sanctions on the Adelaide-based casino, which is currently scrutinized for alleged money laundering activities.

SkyCity Adelaide is at the center of a forthcoming legal battle with the financial crimes watchdog, with proceedings set to commence in June. This move by the government underscores a growing commitment to combating financial misconduct within the gambling sector.

The Proposed Law Amendment

Andrea Michaels, Minister of Consumer and Business Services, is championing significant updates to the state's casino regulations, which have remained unchanged since 1977. Under the new proposal, the maximum penalty for SkyCity Adelaide could surge to AU$75 million (US $48.6 million), a substantial increase from the current AU$45 million (US $29 million). Michaels highlighted that the legislative updates aim to align South Australia’s penalties with those in other states and to empower the financial crime watchdog with enhanced regulatory control.

The amendments to the Casino Act would expand the powers of the SA Liquor and Gambling Commission, including the authority to award, review, and revoke casino licenses. More importantly, the Commissioner would gain broader powers to investigate and penalize violations of the act. Michaels emphasized the public's expectations for responsible conduct from casino operators, stating, "The community has certain expectations about the behavior of our casino license holder. We want to see greater responsibility, which will be achieved through these enhanced fines."

This legislative reform initiative is part of a broader strategy to enhance oversight and enforce stricter compliance across Australia's expanding gambling sector. By ensuring that casinos operate within the legal framework and adhere to high ethical standards, the government aims to address the complexities of responsible gaming. This is particularly challenging given the increase in Australian online casinos and land-based venues targeting players. The SA Liquor and Gambling Commission maintains responsible gaming practices amidst this growth, underscoring the importance of updated regulations to keep pace with the evolving industry.

Civil Proceedings Against SkyCity for Compliance Issues

In December 2022, the South Australian government signaled its intention to revise the penalties for gambling operations. This decision followed AUSTRAC's move to initiate a civil lawsuit against SkyCity Casino, accusing the operator of failing to meet anti-money laundering and counter-terrorism financing requirements.

According to AUSTRAC, the casino operator neglected to perform adequate due diligence on 124 customers, constituting a serious breach of regulations. AUSTRAC highlighted that SkyCity's management was cognizant that some of these customers were high-risk or politically exposed individuals yet chose to overlook these risks. AUSTRAC's deputy CEO, Peter Soros, criticized SkyCity for not having an effective anti-money laundering and counterterrorism compliance policy.

These allegations were detailed in a report by the authority and subsequently submitted to the Federal Court. The report provided a comprehensive account of the casino's failures to adhere to the Anti-Money Laundering and Counter-Terrorism Financing Act of 2006. In response to these proceedings, SkyCity agreed with AUSTRAC in February 2024. The casino accepted the claims and consented to pay a civil penalty. SkyCity had initially set aside $45 million as part of this settlement to cover the expected fines.

The New Regulatory Proposal in South Australia

Ms. Michaels outlined that the newly proposed regulations in South Australia are designed to rectify past oversights and prevent future infractions. Under these proposals, penalties could escalate significantly, potentially reaching up to $75 million for establishments like SkyCity Casino. This is due to the amendments allowing for additional fines on top of those already imposed by the courts. Ms. Michaels emphasized the importance of ensuring casino operators know that the state’s gaming watchdog has the discretion to augment fines, considering the existing penalties.

In response, a representative from SkyCity acknowledged the government's intention to increase fines, stating, "SkyCity recognizes the privilege of holding South Australia's sole casino license, and we are committed to maintaining full cooperation with all regulatory bodies."

Support for the proposed penalty enhancements comes from other notable figures, including Acting South Australian Liquor and Gambling Commissioner Fraser Stroud and independent Upper House MP Frank Pangallo. Pangallo, who has been vocal in his advocacy for a special commission to oversee the SkyCity Casino issue, commended the proposal as a necessary measure. He expressed concerns over the casino’s ability to uphold the standards required by its license, suggesting that the significant potential fines reflect the seriousness of their past compliance failures.

Final Reflections on SkyCity Adelaide's Regulatory Challenges

Over recent years, SkyCity Adelaide has encountered a series of criticisms and sanctions that seem to be escalating. Many residents of South Australia are expressing relief at seeing casino operators like SkyCity Adelaide taking responsibility for their actions by acknowledging past mistakes and agreeing to financial penalties. Furthermore, the introduction of sterner penalties serves as a potential deterrent, which many hope will prevent similar issues in the future. This shift towards greater accountability is seen as a positive step towards ensuring a more responsible gambling environment in the region.

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