As an industry which has long been a vital gateway for organised crime, financial crime regulators appear to finally be catching up in the race with SkyCity Entertainment (ASX: SKC) the latest to have their operations probed by AUSTRAC.

The investigation was confirmed this morning by the New Zealand-based company which operates SkyCity Adelaide and will be focused on breaches to the Anti-Money Laundering and Counter-Terrorism Financial Act 2006.

AUSTRAC, Australia’s financial crime watchdog, has concerns which primarily relate to SkyCity Adelaide’s management of customers that were identified as “high risk” and “politically exposed” over various periods between 2015 and 2019.

“SkyCity takes its anti-money laundering responsibilities and obligations very seriously. SkyCity 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,” the Company said in a statement.

Having commenced their internal investigations into SkyCity in 2019, the regulator will now request information from SkyCity which has stated its intent to fully cooperate with AUSTRAC in relation to its investigation into SkyCity Adelaide.

In April 2021, SkyCity confirmed it had completed an internal review into its operations with the decision made to permanently cease dealing with all junket operators – international agents that specifically organise ‘gambling tours’ who receive commissions based on money gambled by the touring groups.

Like its industry rivals, SkyCity has been severely affected by COVID-19 and travel restrictions, reporting a 37.7% decline in revenue (NZD $449.9m) for the 6 months ended 31 December 2020.

The timing of this investigation coincidentally comes while rival operator Crown Resorts (ASX: CWN) is being investigated via the Royal Commission into the suitability of Crown Melbourne Limited to hold a casino licence.

As the hearings progress, there is minimal resistance to the fact Crown Melbourne has knowingly facilitated money-laundering through its operations while the investigation has further uncovered its guerrilla marketing tactics that target problem gamblers.

Should the James Packer-backed entertainment company be classified unfit to operate a casino licence, indicative takeover offers are already on the table from Star Entertainment Group (ASX: SGR) and private equity firm The Blackstone Group.