Christchurch Casino Faces Record $5.06 Million AML Penalty Following Extensive Compliance Failures

In what stands as the largest anti-money laundering penalty in New Zealand’s history, Christchurch Casino has agreed to pay $5.06 million following a Department of Internal Affairs (DIA) investigation into widespread breaches of the country’s Anti-Money Laundering and Countering Financing of Terrorism Act 2009. The settlement, which now awaits final approval from the High Court, casts a sharp spotlight on regulatory shortcomings in the gambling sector and underscores the risks faced by reporting entities that fail to maintain effective AML/CFT programmes.

Christchurch Casino’s admission of liability for sustained compliance breakdowns over a five-year period signals a watershed moment for regulatory enforcement in the country’s casino industry. “The failings were not isolated incidents,” noted the DIA in documents submitted to the court. Investigators examined the casino’s operations between May 2023 and September 2024 and identified extensive and systemic violations dating back to late 2018 and continuing through to the end of 2023.

The breaches included the casino’s failure to implement a compliance programme that met even the minimum statutory obligations under the AML/CFT Act. In particular, the investigation revealed the absence of effective policies and procedures for detecting and reporting suspicious activity, weak enhanced due diligence processes for high-risk customers, and a lack of consistent record-keeping. According to the DIA, Christchurch Casino failed to terminate client relationships where red flags were raised or where it was unable to adequately assess the risks involved. These lapses, the regulator concluded, created vulnerabilities that could have been exploited by criminal actors.

Importantly, while Christchurch Casino was not accused of directly facilitating money laundering or terrorist financing, the severity of the compliance failures raised significant concerns about the casino’s ability to protect the financial system from misuse. The DIA emphasized that the case was about “persistent systemic failures in compliance processes” rather than direct criminal activity.

The penalty is particularly notable for the casino’s full admission of the seven causes of action filed by the DIA. In doing so, Christchurch Casino has agreed not only to pay the record $5.06 million but also to undertake extensive remediation efforts. Such a forthright settlement is rare in regulatory enforcement cases of this scale and reflects a strategic decision to cooperate with authorities in order to avoid a prolonged and costly legal battle. It also serves as a strong warning to other casino operators about the consequences of sustained non-compliance.

Christchurch Casino’s compliance programme was found to be inadequate in multiple key areas. The regulator highlighted deficiencies in the tailoring of the AML/CFT framework to the casino’s specific risk profile, failures to apply enhanced due diligence to high-value or foreign patrons, and weak transaction monitoring processes. Moreover, the casino failed to maintain the records required by law, which impaired the DIA’s ability to perform proper oversight and conduct effective investigations.

These shortcomings breached several provisions of the AML/CFT Act, particularly those mandating customer due diligence (sections 15–24), transaction monitoring (section 30), and record-keeping (section 49). The Act, which aligns closely with the Financial Action Task Force (FATF) Recommendations, is designed to uphold New Zealand’s standing as a robust and transparent jurisdiction for financial activity.

The Christchurch Casino case follows an earlier $2.8 million fine imposed on SkyCity Casino in 2023, further indicating that the DIA is escalating its enforcement strategy against non-compliant reporting entities. According to the DIA, penalties of this magnitude are intended to deter negligence and promote a culture of proactive compliance. “These failures undermined the integrity of New Zealand’s financial system,” the agency stated, “leaving it vulnerable to the movement of illicit funds.”

The negotiated penalty settlement also reflects the DIA’s risk-based approach to supervision, focusing on those entities whose non-compliance could have systemic impacts. The casino’s willingness to cooperate likely contributed to the absence of criminal charges, but the size of the penalty underscores the gravity of the regulatory breaches nonetheless.

For financial institutions and AML compliance professionals, the Christchurch Casino case serves as a timely reminder of the heightened expectations regulators now hold. The industry must understand that the mere absence of proven criminal conduct does not shield reporting entities from serious consequences. Compliance frameworks must be continually reviewed and updated, and businesses must invest in effective training, monitoring, and oversight mechanisms.

Across the sector, this case is likely to trigger a comprehensive reassessment of internal controls, with emphasis on enhanced due diligence for high-risk customers, improved transaction monitoring technologies, and a renewed focus on regulatory reporting obligations. Institutions are also expected to conduct independent audits of their AML/CFT systems to proactively detect and close compliance gaps before facing regulatory intervention.

The broader regulatory trend, both in New Zealand and globally, points toward more stringent enforcement, particularly in sectors like gambling, which the FATF has identified as high-risk for money laundering. Casinos, given their exposure to large volumes of cash and cross-border clientele, must prepare for intensified scrutiny and uphold the highest standards of due diligence and internal control.

While Christchurch Casino’s agreed penalty is a historic first for New Zealand, it may not be the last. With the High Court’s final decision pending, the case sets a powerful precedent for how AML compliance will be regulated and enforced going forward. The outcome is a stark warning: systemic failings, even without direct evidence of laundering, are enough to trigger multi-million dollar penalties and reputational damage that could take years to repair.

The road ahead for Christchurch Casino will involve not only paying the financial penalty but also undertaking a wholesale overhaul of its compliance infrastructure. Demonstrating meaningful reform will be essential to regaining the trust of regulators and the public. The penalty may mark the end of the enforcement process, but it is only the beginning of the casino’s journey toward regulatory rehabilitation.

This case marks a critical turning point for the gambling sector in New Zealand. It underscores that regulators will not tolerate lapses in AML compliance and that even unintentional failures can result in severe financial and reputational consequences. The message is clear: complacency is no longer an option.

By fLEXI tEAM