New Zealand’s SkyCity Entertainment Group and its Australian subsidiary SkyCity Adelaide Pty Limited have entered into a non-binding heads of agreement with South Australia’s Liquor and Gambling Commissioner to fully resolve all outstanding regulatory matters arising from a recent independent review into their suitability to hold a casino license for SkyCity Adelaide.
The results of that review, released last August, ultimately found the Adelaide casino operator suitable but highlighted significant failings of SkyCity Adelaide’s casino management, mainly in relation to its AML/CFT obligations.
The heads of agreement pre-empts a binding tripartite settlement deed, the key terms of which include the payment by SkyCity of an AU$21 million (US$14.7 million) fine, the appointment of a dedicated SkyCity Adelaide CEO and establishment of a SkyCity Adelaide Board of Directors that must comprise a majority of non-executive directors and are independent of the parent company, SkyCity Entertainment Group.
“Reaching this in-principle agreement is an important step for SkyCity and reflects the significant work our team has done over the past four years to transform our compliance culture, strengthen our governance, and earn back the trust of our regulators,” said SkyCity CEO Jason Walbridge.
“We accept the findings that led to this outcome and take seriously the obligations we have committed to. The structural changes for the Adelaide Casino – including an independent Adelaide board and locally accountable leadership – reflect a genuine commitment to operating as a responsible casino operator. We are grateful for the constructive engagement of the Commissioner’s office throughout this process.”
The heads of agreement includes full and final settlement of all matters known to the Commissioner arising from the independent review as well as several other matters.
The AU$21 million fine is payable in three installments, the first AU$7 million (US$4.9 million) payment to come within 28 days of the tripartite settlement deed followed by the second within one year and the third within two.
By 1 January 2028, the SkyCity Adelaide Board is to comprise a majority of non-executive directors who, including the chair, must be independent of SkyCity Entertainment Group. Likewise, SkyCity Adelaide will be prohibited from delegating functions and responsibilities to the parent company without the Commissioner’s approval.
The group must also appoint a SkyCity Adelaide CEO who reports to the SkyCity Adelaide Board and with all general managers reporting to that SkyCity Adelaide CEO. There is similarly an obligation to appoint an independent compliance auditor to report annually on compliance under the regulatory regime.
Other measures include a commitment by SkyCity Adelaide to phase out the use of cash for transactions over AU$4,999 and a prohibition on junkets at the Adelaide casino. SkyCity noted that junket activity ceased at the property in April 2021.
SkyCity previously paid a AU$67 million (US$44 million) penalty for AML failures under a separate agreement it reached with AML regulator AUSTRAC.
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