AUSTRAC cracking down on operators’ AML violations

SkyCity Adelaide Pty Ltd (SkyCity) and the Australian Transaction Reports and Analysis Centre – AUSTRAC – the Government agency responsible for detecting, deterring and disrupting criminal abuse of the financial system, have filed joint submissions with the Federal Court of Australia, proposing a AUSD 67 million penalty over the casino’s contravention of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act).

The operator has agreed to pay the fine as an "appropriate penalty" after admitting it had engaged in misconduct by operating in contravention of the AML/CTF Act, including that its AML/CTF Programs did not meet the requirements of the AML/CTF Act and AML/CTF Rules and that it did not carry out appropriate ongoing customer due diligence with respect to certain higher risk customers and customers transacting through higher risk channels. This is not SkyCity's first run-ins with regulators in recent months. Last year, the operator faced a temporary suspension of its licence due to compliance issues, leading to the exit of the company’s CEO and COO.

Next month the Federal Court will determine if the fine is appropriate.

It appears that Australia’s biggest sports gambling companies should be prepared for a “wake-up call” as the financial crime watchdog finalises its investigation into suspected breaches of money-laundering laws.

In fact, there have been several reports of cases of inappropriate behaviour and oversight of AML practices by operators across Australia, whilst AUSTRAC has launched several investigations in recent months regarding operators such as Sportsbet, Ladbrokes and Bet365 for breaches of the same act placed against SkyCity.

It is believed that any action by AUSTRAC could possibly influence the federal government’s plans to regulate the industry amid calls for a total ban on gambling ads.

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