Casino company SkyCity Entertainment Group has confirmed it was handed a $4.16 million fine for breaching anti-money laundering and terrorism financing obligations.

The company told the NZX the High Court imposed the civil penalty on SkyCity Casino Management (SCML) today.

The company must pay the Department of Internal Affairs (DIA) within 15 days.

“This brings the department’s civil proceedings to an end,” SkyCity said in an announcement.

“SkyCity is aware that, as a casino operator, we have a responsibility to combat money laundering and terrorism financing. This is a responsibility we take very seriously,” chief executive Jason Walbridge said.

“We will continue to upgrade our anti-money laundering and counter-terrorism financing systems to ensure we meet both our regulatory obligations and the expectations of the communities in which we operate,” he added.

DIA took civil proceedings against SkyCity for breaching its Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) obligations.

DIA general manager Regulatory Services John Sneyd said Justice Campbell had ordered SkyCity to pay an agreed civil pecuniary penalty of $4.16m following SkyCity admitting to all five causes of action in DIA’s statement of claim. SkyCity would also pay toward the Department’s legal costs.

“We are pleased the Court, DIA and SkyCity were able to finalise the settlement agreement promptly. For us to achieve this without years of court proceedings and legal costs is a great outcome.

“Casinos can be an attractive way for criminals to launder proceeds of crime. We cannot take the risk that criminals might choose New Zealand casinos as a way of cleaning their dirty money. Casinos must have robust processes in place to protect them from misuse.

“We are satisfied that SkyCity admitted responsibility for their significant failings alongside their continued improvement to meet their AML/CFT obligations, to make sure breaches like these don’t happen again.”

The Department of Internal Affairs conducted a review of SkyCity’s AML/CFT compliance between September 2022 and December 2023. The review found SkyCity breached its obligations under the Act.

Earlier this year the company admitted breaches spanning from 2018 to 2023.

The review by DIA focused on SkyCity’s AML/CFT compliance relating primarily to its international business customers and found systemic non-compliance and breaches of its obligations relating to risk assessment, establishing, implementing and maintaining an AML/CFT compliance programme, the monitoring of accounts and transactions, conducting compliant enhanced customer due diligence, and terminating existing business relationships when required.

These failures spanned between February 2018 and March 2023.

There was no evidence to suggest that SkyCity was directly involved in money laundering or the financing of terrorism.

The High Court on September 5 heard the company had stopped dealing with international casinos or money remitters on behalf of clients.

The casino’s counsel Alix Boberg said these changes were part of a series of reforms tackling high-risk aspects of the casino’s international business.

The Auckland casino operator could have faced a fine exceeding $5m but Boberg said it agreed with Internal Affairs that a 25% discount was available.

On a separate matter, SkyCity voluntarily shut its Auckland casino floor for five days earlier this month after breaching its host responsibility programme.