New Zealand’s Christchurch Casino faces legal action over alleged AML failures

Jenny Ortiz December 12, 2024

SiGMA news

Christchurch Casino is at the centre of legal proceedings initiated by New Zealand’s Department of Internal Affairs (DIA) over alleged breaches of anti-money laundering (AML) and counter-financing of terrorism (CFT) laws. According to local reports, the allegations concern failures to meet compliance obligations under the AML/CFT Act 2009 between December 2018 and December 2023.

While the DIA has clarified that the casino is not suspected of directly engaging in money laundering or terrorism financing, the organisation highlighted that all reporting entities must have effective systems to identify and mitigate such risks. The failures reportedly involve inadequate compliance programmes, insufficient customer due diligence, lapses in account monitoring, and a lack of record-keeping.

Legal and operational implications

According to Serge Sablyak, Director of the DIA’s AML/CFT Group, New Zealand casinos are particularly vulnerable to criminal exploitation if robust safeguards are not maintained. He emphasised that entities failing to uphold these standards will face accountability.

Christchurch Casino, owned by Skyline Enterprises, responded by acknowledging the proceedings and stating its commitment to enhancing its compliance systems. The company said it has invested heavily in people, technology, and processes to align with its AML/CFT obligations. Despite these efforts, the legal challenge raises questions about its current practices and oversight mechanisms.

A broader regulatory context

This legal action occurs against the backdrop of ongoing debates around gambling regulations in New Zealand. In 2022, Christchurch Casino faced scrutiny over its plans to establish an online casino, which sparked concerns among problem gambling advocates. The New Zealand government has since announced plans to regulate online gaming by 2026, reflecting a broader effort to strengthen oversight in the gambling sector.

Christchurch Casino is one of a small number of casinos operating independently of SkyCity Entertainment Group, making this case a test of New Zealand’s regulatory framework. The outcome could set a precedent for other operators, reaffirming the importance of compliance in preventing financial crimes.

Awaiting High Court proceedings

As the matter proceeds to the High Court, Christchurch Casino has pledged to cooperate with the DIA to resolve the issues swiftly. However, the case highlights the ongoing challenges faced by the gaming industry in balancing operational ambitions with regulatory compliance.

With the DIA taking a firm stance on AML/CFT adherence, the proceedings against Christchurch Casino signal a warning to other entities about the repercussions of inadequate risk management and governance practices.

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