Casinos across Australia have been under the microscope — and the focus on SkyCity Adelaide is about to sharpen even further.
South Australian authorities have just ramped up monitoring of the state's only licensed casino, amid allegations of serious and systemic non-compliance with anti-money laundering and counter-terrorism financing laws.
The latest measures come during ongoing Federal Court action launched by the financial crimes watchdog AUSTRAC against SkyCity Adelaide, and a paused review by a retired Supreme Court judge.
Here's what we know so far, and how the casino ended up here.
What's the latest?
Dini Soulio is South Australia's Liquor and Gambling Commissioner, and it's his job to make sure licensed venues comply with state laws.
On Friday, he used his powers under the Casino Act 1997 to direct SkyCity Adelaide to increase scrutiny on its operations and compliance.
The casino will have to prepare a "program of work" for the commissioner, outlining what it's doing to meet its regulatory obligations, including anti-money laundering, counter-terrorism financing, and gambling-related harm minimisation responsibilities.
It will also have to appoint a "suitably qualified independent entity" — an appointment Mr Soulio will himself need to approve — to review that program, and make sure it's implemented.
In other words, Mr Soulio wants to know what the casino is doing to ensure it's following the law, and he wants an outsider keeping an eye on the process.
Mr Soulio said he had issued the direction following "careful consideration of issues identified in the proceedings brought against SkyCity Adelaide by AUSTRAC in the Federal Court", as well as "preliminary materials" from a separate investigation.
"After evaluating all the material and considering SkyCity Adelaide's responses to my concerns, I feel it is appropriate for SkyCity Adelaide to demonstrate it is meeting these important regulatory obligations," he said.
"I believe it's important that the people of South Australia can have confidence that SkyCity Adelaide, as the licensee of the Adelaide Casino, is operating effectively to minimise gambling harm and ensure compliance with all anti-money laundering and counter-terrorism financing regulatory obligations."
The new independent expert will need to report back to the commissioner about any breaches, and both will be checking in regularly to make sure SkyCity Adelaide is doing what it should.
"The Independent Monitor will not displace the role of the SkyCity Adelaide Board, but will monitor SkyCity's enhancement program implementation and operations to ensure that these objectives are met," Mr Soulio said.
The casino said it would "fully co-operate" with the commissioner's direction, and "work closely with the expert it appoints".
How did SkyCity Adelaide end up here?
Mr Soulio's move is the latest in a series of actions taken by state and national regulators against Australia's casinos over the past two years.
In June 2021, the Australian Transaction Reports and Analysis Centre (AUSTRAC) informed the ASX it was investigating three casinos for potential "serious non-compliance" with anti-money laundering and counter-terrorism financing laws – including SkyCity Adelaide.
AUSTRAC is tasked with preventing organised criminals and terrorists using banks and other regulated companies to facilitate their operations.
SkyCity Adelaide initially came under scrutiny for potential failures in its treatment of high-risk and "politically exposed" customers in two periods: July 2015 to June 2016, and July 2018 to June 2019.
In July last year, the SA Liquor and Gambling Commissioner asked retired Supreme Court justice Brian Martin AO KC to review the casino's operations, to "ensure South Australians can have confidence in the way [it's] operating".
Five months later, AUSTRAC announced it was launching civil action against SkyCity Adelaide in the Federal Court, alleging "systemic non-compliance with Australia's anti-money laundering and counter-terrorism financing laws".
"AUSTRAC's investigation identified a range of circumstances where SkyCity failed to carry out appropriate ongoing customer due diligence," deputy chief executive Peter Soros said at the time.
"SkyCity also failed to develop and maintain a compliant AML/CTF (anti-money laundering and counter-terrorism financing) program, leaving it at risk of criminal exploitation."
Documents lodged with the Federal Court stated SkyCity "failed to carry out due diligence on 124 customers", and that the casino recorded $4 billion in combined turnover from those customers from December 2016.
"SCA was aware that some of the customers had been charged or arrested in connection with offences, including dealing with the proceeds of crime and money laundering," the documents stated.
Star Entertainment, which owns casinos in New South Wales and Queensland, is facing similar civil action, while a WA Royal Commission last year found Crown Perth casino to be "unsuitable to hold a gaming license".
What happens now?
The Federal Court action is still going, and Mr Martin has paused his review for the time being.
But the new direction from the SA commissioner will take effect within weeks.
SkyCity Adelaide has 28 days to comply with Mr Soulio's order or risk a $100,000 fine.
The SkyCity Entertainment Group's chief operating officer David Christian said it was "very important … that our customers, community and the regulators have confidence in our commitment to the highest standards of compliance, both in minimising gambling harm and ensuring we meet out … obligations".
"We will fully co-operate with the commissioner in relation to the selection and appointment of the independent expert, and work closely with the independent expert," he said.
South Australia's Premier Peter Malinauskas said his government supported the move.
"I think the industry has been rocked to its core," he said.
"We have one licensed casino operator in South Australia and that brings with it a lot of privileges, and SkyCity needs to treat that with the responsibility that is required.
"We believe that a monitoring element to all of that is critical, not just to SkyCity, but for the general public having confidence that the casino is only doing what it should be doing.
"This is a wise step forward and one the government is happy to support."
