Retired South Australian Supreme Court Judge Brian Martin KC has for the last seven months been investigating whether SkyCity Adelaide is suitable to hold a casino license in South Australia and, if not, “what changes, if any, are required for the licensee to become a suitable person to hold the casino license”.

The independent review was established by the state’s Liquor and Gambling Commissioner on July 1 last year after similar inquiries interstate uncovered major regulatory failures within the casino industry.

It was also set up more than a year after the federal government’s financial crimes watchdog AUSTRAC launched an investigation into SkyCity Adelaide’s compliance with Australian anti-money laundering laws.

Martin was due to provide a written report of his findings to Liquor and Gambling Commissioner Dini Soulio on February 1, 2023. Soulio confirmed late Monday night that he had received “preliminary materials” from Martin’s inquiry.

But the findings of Martin’s review have been complicated after AUSTRAC revealed in December it would be taking SkyCity Adelaide to Federal Court over alleged “serious and systemic” non-compliance with Australian anti-money laundering laws.

Soulio said Martin advised him that the question of whether SkyCity Adelaide is suitable to hold a South Australian casino licence could not be determined “reliably” until AUSTRAC’s Federal Court proceedings were resolved.

“While Mr Martin’s investigation has been separate from the proceedings initiated by AUSTRAC in the Federal Court against SkyCity, there is clearly some overlap that will need to be considered,” Soulio said in a statement.

“Mr Martin has advised that until the resolution of the AUSTRAC proceedings, it is not possible to determine reliably the question of suitability.

“On that basis, I have put on hold the investigation with regard to an overall determination of suitability.”

Soulio also said he was still “considering my options” about potential action resulting from Martin’s inquiry.

“In the meantime, I have written to SkyCity relating to the allegations raised in the AUSTRAC proceedings and the preliminary matters raised in Mr Martin’s investigation,” he said.

“I am currently considering my options regarding any potential action I may take. While this process is underway, it would not be appropriate to comment further.

“Further information will be made public as soon as possible.”

SkyCity Adelaide’s New Zealand parent company, SkyCity Entertainment Group, noted the Commissioner’s decision in a statement to the ASX this morning.

It said SkyCity Adelaide continues to have a “constructive dialogue” with the Commissioner.

“SkyCity and SkyCity Adelaide will continue to cooperate with Consumer and Business Services and any further requests for information and documents,” the company said.

“SkyCity Adelaide continues to implement its AML (anti-money laundering) and host responsibility programmes to uplift its AML and host responsibility processes and practices at the SkyCity Adelaide casino.

“This has been a key priority for the business and will remain so.”

AUSTRAC’s 800-page statement of claim in the Federal Court contains an extensive list of allegations against SkyCity Adelaide claiming breaches of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006.

The claim alleged SkyCity Adelaide’s contraventions of Section 81 of the Act – the requirement to have an anti-money laundering/counter-terrorism financing (AML/CTF) program – are “too numerous to quantify”.

It also alleged 124 contraventions of section 36 of the Act which requires casinos to conduct ongoing customer due diligence for AML/CTF risks.

Among AUSTRAC’s allegations are claims the casino provided services to 59 customers for whom “high ML/TF (money laundering/terrorism financing) risks were indicated”.

SkyCity Adelaide made around $74 million in losses from these 59 customers, AUSTRAC alleges.

The watchdog also claims one customer, known as “Customer 11”, was an “immediate family member of a person holding a prominent public position in a foreign government body”.

The claim further alleges that “many” customers “engaged in large cash transactions and transacted with cash that appeared suspicious including in plastic bags, garbage bags, cash bundled together with rubber bands or irregular straps, cash that was dirty and cash that appeared to have been buried”.

Speaking to reporters on January 31, a day before Martin was due to hand down his inquiry, Premier Peter Malinauskas said the state government was prepared to make “necessary changes” to the casino pending the outcome of the review.

“We expect SkyCity to operate with integrity and abide by the law,” Malinauskas said at the time.

“I believe that the management that is in place is committed to that exercise, but that doesn’t mean they shouldn’t be subject to serious scrutiny, because it is a privilege owning and operating a casino

“We expect them to have the best interests of the South Australian community at heart and the Brian Martin view allows a degree of examination around that.”

Asked if the government was preparing to make some “very significant changes” to the way SkyCity Adelaide operates, Malinauskas said: “We certainly do not rule that out.”

“If the government forms the view that SkyCity hasn’t been operating the casino consistent with a position of integrity, then we stand ready to make any necessary changes.”

Asked if the report would be made public, Malinauskas said: “Unless there’s a good reason not to, yes.”