Skycity Entertainment Casino in Adelaide Under Review from Regulator
Following a series of scandals at Crown Resorts and Star Entertainment, Skycity has now been identified as a potential risk of scrupulous behavior – and is now under investigation. The South Australian regulator has pointed out a number of risk vectors associated with the casino, and has indicated it will subject a review into the internal control measures being utilized at the venue. The industry is very much on high-alert following the catastrophic findings over the last couple of years at two of Australia’s largest and most reputable casino groups.
SkyCity have been told to make themselves available for investigators, as the political discourse in Australia becomes more critical of casino operating practices in light of scandals at Crown Resorts and Star Entertainment. SkyCity have promised to comply fully with the investigation. ©PublicDomainPictures/Pixabay
Casinos are not highly regarded within the court of public opinion these days, their reputations are in tatters following damning reports of systemic money-laundering, corrupt governance at the leadership level, and a rotten culture that lent itself to exploitation by bad actors. These factors are not exactly unique to the gambling sector, but the expectation was that these age-old companies would be held to higher standards than the shocking behavior that was laid to bare in the Australian courts.
At the very center of the scandal was James Packer, and other board members working for Crown Resorts. Through a series of illegal decisions, the casino became a harbor for criminals to wash dirty cash without the prying eyes of law enforcement having a view on their transactions. The enablement of these activities is the most concerning part, and the corporate governance culture enacted at Crown remains one of the most contentious aspects of this tale.
But besides the public discourse turning against the viability of the casino business, COVID dealt a major blow to the balance sheet of these companies. During the years of the pandemic it has become incredibly difficult for the casinos to generate revenue, often finding themselves without the footfall that would be required in order to drive enough sales across the top-line. In the context of Australia this effect came as a double blow, lack of corporate leadership combined with a terrible macroeconomic situation has shocked the entire sector.
Investigation into SkyCity to Determine License Viability
Unfortunately for SkyCity, there is a lot of fear within the regulatory organizations of Australia that a second Crown Resorts situation is at risk of happening, this is due to the systemic nature of the crimes that were committed at James Packers’ casino. With that being said, there are unfortunately a lot of difficulties surrounding the casino business in Australia, and the licenses are all under investigation now for their suitability, and to ensure the highest standards of gambling law are being upheld.
With the attention now firmly being placed on the casinos to prove their level of compliance, the feeling is that cooperation must be managed in the best way possible to ensure the aims of the review are correctly administered. Leading the charge on the financial regulatory side is AUSTRAC. The Australian financial crime regulator has launched a series of investigations into the SkyCity operation without a specific mandate. Other than their standard checks for anti-money laundering measures and counter-terrorism laws at SkyCity’s venue in Adelaide.
Crown Resorts has been in this situation already, and following a long multi-year investigation had its operating license drastically reigned in. Following the outcome of that period, the firm was restricted to only being able to operate within Victoria and Western Australia, and under two years of special governmental supervision. This saga widely reported on throughout the course of casino news media has re-ignited the debate in Australia around the rights of casinos, and gambling laws in general.
Finally, Star Entertainment further weakened the operating mandate of casinos. The CEO of the company was forced to step down from his post following a series of damning accusations into the viability of the casino’s internal control mechanisms. In this particular case, the group had breached anti-money laundering codes, and counter-terrorism laws. The firm has already been proactive in its response and went ahead with hiring new senior staff specially to keep the firm compliant with all the laws relevant to its operating license.
