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Legislative Council - Fifty-Fourth Parliament, Second Session (54-2)
2021-06-09 Daily Xml
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SkyCity Adelaide

The Hon. F. PANGALLO (15:32): It is a proven fact that criminals throughout the world use casinos for their criminal gain. Transnational organised crime networks are known to use casinos to convert their illicit profits into legitimate funds. Casinos are particularly attractive because they are cash-intensive and high-volume businesses.

TOCs target operations in jurisdictions where political oversight is lax and where there is a failure to carry out due diligence on casino operations. Do not for a minute think it is not happening right under our noses. Royal commissions are underway in Victoria and in Western Australia on the back of damning revelations made against Crown, the company that operates the two casinos in both of those states, by the Bergin inquiry into Crown's fitness to hold a licence in New South Wales.

Up until this week, we had rarely seen controversy about Adelaide's quaint Railway Station Casino that has been around since 1985. New Zealand-owned SkyCity rocked the stock exchange with a statement that it was being investigated by AUSTRAC after the financial crimes watchdog identified potential serious noncompliance and money laundering issues between 2015 and 2019. The company said AUSTRAC's concerns were raised as part of a compliance assessment commenced in September 2019 focusing on the Casino's 'management of customers identified as high risk and politically exposed persons'.

So serious are these allegations they have the potential to undermine the security of the state. Far-fetched? Far from it. Here is what AUSTRAC defines a politically exposed person as:

…an individual who holds a prominent public position or role in a government body or international organisation, either in Australia or overseas. Immediate family members and/or close associates of these individuals are also considered PEPs.

PEPs often have power over government spending and budgets, procurement processes, development approvals and grants. Examples of PEPs include government ministers or equivalent politicians, senior government executives, high ranking judges, high-ranking military officers, or board members or executives of an international organisation…

Because PEPs hold positions of power and influence they can be a target for corruption and bribery attempts, and ultimately for money laundering or terrorism financing activities.

I do not think anyone will doubt the gravity or seriousness of such an explanation. That is why SA-Best is asking questions of the Treasurer and the government about whether the government has sought clarification from the federal agency on just who these politically exposed persons or customers are and whether the government was concerned that the PEPs could be someone of note who could pose a security threat to the state.

All this is occurring in an environment where the ICAC commissioner, the Hon. Ann Vanstone QC, recently published a report to remind South Australia's public officers of their obligation to appropriately deal with and manage conflicts of interest. Perhaps, in light of SkyCity's revelations this week, the commissioner might want to turn her attention to it. Every South Australian should be alarmed by AUSTRAC's bombshell, and we believe a royal commission may well be needed here.

When SA-Best questioned the government about an independent inquiry into the Adelaide Casino in March, we were typically fobbed off and told that our local regulator, the Commissioner for Consumer and Business Services, had it all in hand. Really? AUSTRAC seems to have found differently. The Bergin report, which sparked the current royal commission, uncovered major flaws in corporate governance, which facilitated money laundering and links to criminal gangs.

The report recommended junket operators be banned from dealing with casino operators, that legislation be tightened to put the onus on casinos to prevent money laundering, and said criminal elements, probably including transnational criminal organisations, had run hundreds of millions of dollars through Crown's accounts. Shortly after the release of that report, SkyCity banned working with junket operators.

SkyCity happens to be the centre of a civil Supreme Court action involving shady Chinese junket operators, launched by a mysterious wealthy Chinese national, Mr Linong Ma. The action relates to gambling sessions at the Casino in May 2019, where Mr Ma allegedly won more than $5 million but alleges the junket operator failed to pay the entire amount. As Lord Acton once said, power tends to corrupt and absolute power corrupts absolutely.

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