UPDATE 1-South Australia to review Skycity's Adelaide casino amid broader scrutiny

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July 1 (Reuters) - South Australia's gambling regulator said on Friday it would commission an independent review of Skycity Entertainment's Adelaide casino, after probes in other states found shortcomings at rivals Crown Resorts and Star Entertainment.

Casino operators in Australia have been dogged by damning reports of shirking anti-money laundering rules, dysfunctional governance and poor corporate culture, while COVID-19 curbs eroded their profits in the last two years.

Several matters raised in inquiries in other states "extend beyond any one organisation and point instead to broader systemic issues within the casino industry", said Dini Soulio, South Australia's liquor and gambling commissioner.

The investigation will be "to ensure that the way that SkyCity operates demonstrates that the licensee is still suitable to hold the casino licence in South Australia," Soulio added.

Skycity said in a statement that it would fully cooperate with the review.

Australia's financial crime regulator had last year launched an investigation into possible breaches of anti-money laundering and counter-terrorism laws at Skycity's operation in Adelaide.

Crown Resorts, which was bought out by private-equity giant Blackstone, had its licence for its flagship Sydney casino suspended 17 months ago and was only allowed to operate in Victoria and Western Australia under two years of government supervision.

Star lost its chief executive earlier this year in the wake of multiple inquiries over possible breaches of anti-money laundering and counter-terrorism laws at its casinos. It hired a new boss just this week.

(Reporting by Shashwat Awasthi; Editing by Anil D'Silva)

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