AUSTRAC Launches Second Specialist Unit to Tackle Money Laundering

Summary

• AUSTRAC said reports about suspicious practices in the gambling sector continue to rise
• The new unit was formed in response to the increasing threat of money laundering in the gambling industry
• The agency supports the implementation of cashless gaming to combat money laundering

The Australian Transaction Reports and Analysis Centre (AUSTRAC) has intensified its crackdown on gambling operators violating the country’s anti-money laundering (AML) laws with the formation of a new specialist AML unit dedicated to the gambling sector.

This comes after the financial watchdog identified “serious non-compliance” in a number of businesses.

Increasing Threat of Money Laundering in Gambling Sector

The creation of the new unit follows an investigation conducted by AUSTRAC in November 2022 into UK gambling firms Bet365 and Sportsbet. The agency said it had reasonable grounds to suspect that both companies violated Australia’s AML laws. The probe is ongoing and is carried out by external auditors who will soon submit their findings to AUSTRAC.

The second specialist AML unit has been set up to tackle the increasing threat of money laundering and terrorism financing in the gambling sector, something that AUSTRAC’s manager of regulatory operations Bradley Brown highlighted in his speech at the recent Regulating the Game conference in Sydney.

Brown said they have received more reports of suspicious practices within the industry in the last 12 months, and their main priority right now is to “manage the risk” when it occurs. He also clarified that they are not necessarily against the gambling sector.

AUSTRAC Backs Cashless Gaming

As to the widely debated cashless gaming issue, Brown supports the idea, saying cash remains a significant risk at gaming venues. Cash transactions at land-based gambling venues pose a major challenge for AUSTRAC in its fight against money laundering, given that many of them are linked to crime.

In October of last year, the NSW Crime Commission found that gaming machines at pubs and clubs in the state have become an instrument of crime, with billions of dollars in dirty money going into pokie machines every year.

To address the issue, NSW Premier Dominic Perrottet is pushing for the implementation of cashless gaming cards at pubs and clubs throughout the state. The proposal was high on the agenda at the Sydney event which was attended by senior gambling executives.

Armina Antoniou, manager of financial crime risk at Crown Resort, recognizes the vital role cashless gaming would play in reducing the risk of money laundering, but is concerned about the possibility of data hacks if the measure is eventually implemented.