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NZ-based Skycity Entertainment (ASX:SKC) has revealed it’s been hit with a NZ$4.16M (~A$3.6M) fine from New Zealand’s High Court for breaching anti-money laundering laws.
Perhaps surprisingly – or maybe not, given the relatively minuscule penalty – shares in the stock were up 2% to $1.28/sh in the last minutes of lunchtime trade.
Shareholders on Thursday were likely happy the NZ High Court penalty was a far cry from the $67M penalty it copped from AUSTRAC earlier this year; the company also has casino assets in Adelaide.
The NZ High Court penalty relates to breaches of anti-money-laundering and counter-terrorism laws described as “historic” in nature. The company wrote on Thursday it had accepted responsibility and issued an apology “for its failings in this matter” earlier this year.
“SKyCity is aware that, as a casino operator, we have a responsibility to combat money laundering and terrorism financing … we take [this] very seriously,” SkyCity CEO Jason Walbridge said.
“We will continue to update our … systems to ensure we meet both of our regulatory obligations and the expectations of the communities in which we operate.”
Casinos are regularly used to wash dirty money by organised criminals (or unorganised,) and as for the terrorism end of things, that’s really more to do with the way the legislation is packaged. Any use of a casino to fund terroristic activities would also be, ultimately, an act of laundering.
More often than not, though, the laundering side of things tends to be bikies and their counterparts, not terrorists. To make unexplained wealth (read: drug profits) appear more feasible on paper as gambling proceeds, it’s as simple as exchanging the money for chips, playing for a few hours, and then cashing out.
It’s not the world’s most complex scheme, but it’s enough to confuse investigators into dropping lines of inquiry once things become fittingly tangled.
How, exactly, casinos are expected to identify unexplained wealth versus legitimate wealth also remains a rather good question. Beyond AI facial recognition of known troublesome characters, it’s hard to conceptualise how any casino operator could know for sure.
The news could also, from an Australian POV, feel like casino sector trouble has migrated across the ditch to our nearest Western allied nation.
But at least SkyCity aren’t facing the same disaster as Star.
Shares in Star Entertainment are currently suspended; the company on Wednesday secured a multimillion dollar boost in the form of a debt facility from “corporate lenders.” It’s been suspended since failing to post its full year earnings on time; a steep loss is expected to be reported.
But that’s neither here nor there for Skycity.
The company reported on Thursday it has 15 days to pay the NZ court fine, at that point, the historic breaches case will be over.
The wheel continues to spin.
SKC last traded at $1.28/sh.
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