By Praveen Menon and Savyata Mishra
(Reuters) - Australia's financial crime regulator started civil proceedings against SkyCity Entertainment Group's Adelaide casino on Wednesday, the latest in a series of actions by the government against the country's gambling industry.
SkyCity, which is listed on the New Zealand bourse, was accused by the regulator, Australian Transaction Reports and Analysis Centre (AUSTRAC), of breaching anti-money laundering and counter-terrorism financing laws and could face hefty fines.
"AUSTRAC’s investigation identified a range of circumstances where SkyCity failed to carry out appropriate ongoing customer due diligence," AUSTRAC Deputy CEO Peter Soros said in a statement.
"SkyCity also failed to develop and maintain a compliant AML/CTF program, leaving it at risk of criminal exploitation," he added.
The company's New Zealand-listed shares fell as much as 4% to NZ$2.61, hitting their lowest level since July 14.
SkyCity said in a statement that the regulator was yet to decide the level of penalty it intends to seek. If AUSTRAC's claim was to be accepted in whole or in part by the federal court then SkyCity could be subject to a civil penalty "which may be material", it said.
Casino operators in Australia have been dogged by damning reports of shirking anti-money laundering rules, dysfunctional governance and poor corporate culture, while COVID-19 curbs eroded their profits in the last two years.
The latest development follows an investigation by AUSTRAC in June last year, after probes in other Australian states found shortcomings at casino operators Crown Resorts and Star Entertainment Group Ltd.
Investigations into SkyCity found systemic failures in its approach to anti-money laundering and counter-terrorism financing laws, AUSTRAC said on Wednesday.
South Australia's gambling regulator had also started an independent review of SkyCity's Adelaide casino in July.
The government has been under pressure from consumer advocates and welfare groups to take a deeper look at the industry and bring in more controls on how much people can spend on gambling. Australia is already the world's biggest gambling nation in terms of losses per person.
The problem worsened during the pandemic with more people getting addicted to online gambling.