SkyCity ups provision to $79m in Austrac proceedings – shares rise

SkyCity has reached an agreement with the Australian financial crimes watchdog.

Casino operator SkyCity has reached an agreement with the Australian financial crimes watchdog over apparent breaches at its Adelaide casino, upping its provision for the penalty it expects to pay.

In December 2022, the Australian Transaction Reports and Analysis Centre (Austrac) filed civil proceedings against SkyCity over alleged serious and systemic non-compliance at its South Australian casino.

Austrac had alleged noncompliance with anti-money laundering law, claiming it allowed 59 patrons to churn more than $4 billion in cash through the casino.

A case management hearing on the matter was held today, with SkyCity telling the market that it and Austrac had jointly informed the court they’d come to an agreement over the contraventions SkyCity would admit to.

The two would also jointly propose the penalty amount, subject to finalising a statement of agreed facts, with a penalty hearing set down for June.

Provision

Because of that, SkyCity had increased its provision for the penalty from A$45 million (NZ$49m) to A$73m.

“Notwithstanding the indication provided to the court, the final amount of any civil penalty and associated legal costs that SkyCity Adelaide may be required to pay remains uncertain,” the dual-listed company said in a statement.

Forsyth Barr previously described the original A$45m provision figure as a “best-case” scenario, with its own forecasting suggesting the total provision should have been closer to $150m.

SkyCity’s shares were trading at $1.99 near closing, up 5.2 per cent for the day.