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SkyCity (ASX:SKC) share price sinks 9% on AUSTRAC news

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The SkyCity Entertainment Group Limited (ASX: SKC) share price is under pressure on Monday morning.

At the time of writing, the casino and resorts operator’s shares are down 9% to $3.08.

Why is the SKyCity share price under pressure?

Investors have been selling the company’s shares this morning after it revealed that AUSTRAC has identified potential serious non-compliance by SkyCity Adelaide.

This non-compliance relates to the Australian Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) Act 2006 and the Anti-Money Laundering and Counter-Terrorism Financing Rules Instrument 2007.

According to the release, the potential serious non-compliance includes concerns relating to ongoing customer due diligence, adopting and maintaining an AML/CTF Program, and compliance with Part A of an AML/CTF Program.

These concerns were identified during the course of a compliance assessment which was commenced by AUSTRAC back in September 2019. It was focusing on SkyCity Adelaide’s management of customers identified as high risk and politically exposed persons.

What now?

The matter has been referred to AUSTRAC’s Enforcement Team, which has now initiated a formal enforcement investigation into the compliance of the casino.

At this stage, AUSTRAC has made it clear that it hasn’t yet made a decision regarding what the appropriate regulatory response may apply to SkyCity Adelaide. This includes whether any enforcement action will be taken.

SkyCity has advised that it will fully cooperate with AUSTRAC and stressed that it takes its anti-money laundering responsibilities and obligations very seriously. It also notes that it has processes and practices in place in its business to detect and prevent money laundering and continually reviews these to ensure it meets all anti-money laundering requirements.

Crown hit by investigation

In other news, the Crown Resorts Ltd (ASX: CWN) share price is trading lower today after revealing an AUSTRAC investigation of its own.

For the same reasons as above, the regulator has initiated a formal enforcement investigation into the compliance of Crown Perth.

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