Australia’s financial crime watchdog has launched a second specialist unit in response to the increasing threat of money laundering within the gambling industry, which insiders acknowledge is “a high risk”.
The Australian Transaction Reports and Analysis Centre (Austrac) briefed gambling industry officials on the new unit at the Regulating the Game conference in Sydney this week, warning it had “identified serious non-compliance in a number of businesses”.
Late last year, Austrac launched an investigation into gambling companies Sportsbet and Bet365 on suspicions they failed to comply with anti-money laundering laws. External auditors will soon report back on their findings.
“Austrac allocates its resources to manage the threat of money laundering and terrorism financing in the Australian financial system, relative to the risks faced by different industry sectors,” an Austrac spokesperson said.
“The establishment of a second specialist team focusing on entities in the gambling sector is indicative of the current risk environment in the industry.”
Austrac’s manager of regulatory operations, Bradley Brown, told senior gambling executives there had been a significant increase in suspicious matter reports in the last 12 months.
“There are many legitimate people who seek to gamble and we are not necessarily against the gambling sector, it’s more about managing the risk when it does occur,” Brown said.
Brown also supported the NSW Crime Commission’s push for cashless gaming at poker machine venues to limit money laundering, after some industry figures raised concerns.
The crime commission found billions of dollars in dirty money are being gambled in pubs and clubs every year. Its recommendation was accepted by the NSW premier, Dominic Perrottet, with poker machines a key issue in the state election campaign.
“Cash continues to be a significant risk and is generated through the proceeds of an enormous amount of illicit activity that occurs in Australia,” Brown said.
Crown Resort’s manager of financial crime risk, Armina Antoniou, said the shift to cashless gaming was inevitable and would reduce the risk of money laundering. But Antoniou also raised concerns about its implementation.
“With all the data hacks that we’ve had, Medibank Private and Optus in Australia, does that mean there’s a whole lot of legitimate ID out there on the dark web to purchase so you can basically buy a fully identified digital cashless gaming card that you can use in pokie rooms?” Antoniou said.
“These are risks that land-based gaming operators have not had to face so far. A lot of the online wagering operators deal with this every day and I think we need to be very careful that when we go fully cashless, operators are aware of these additional risks.”
Tabcorp’s acting anti-money laundering compliance officer, Richard Storey, who is on secondment from consultancy firm KordaMentha, said there was no doubt gambling was a high-risk industry.
“Let’s face it, there is still a lot of cash and there is still the ability to transfer value anonymously. It’s a risk and quite a high one. Our boards need to be fully aware of that,” Storey said.
Andrew Gill, a forensic director at consultancy firm McGrathNicol, told industry figures to be wary of journalists looking for malpractice.
“Always remember, the regulators can smell blood in the water but journalists often cause the blood to be spilled in the first instance. So if you’ve got them after you, you’ve got a problem,” Gill said.
“I don’t think it’s very controversial to say there’s enough people out there who are more than willing to have a crack at gaming in every one of its manifestations. So you’ve got to be a lot more vigilant than a lot of other industries.”
