The New South Wales Crime Commission (NSWCC) has issued its final Report into Money Laundering via EGMs in Pubs and Clubs following an extensive investigation.
In commenting on the Report, AUSTRAC CEO, Nicole Rose, said “It is important that pubs and clubs take their anti-money laundering obligations seriously. The year-long investigation has increased collective understanding of the threat, and renewed vigilance around pubs and clubs will limit the opportunity for criminal infiltration.”
The “Project Islington Inquiry” was conducted in conjunction with the Independent Liquor and Gaming Authority NSW and with the assistance of AUSTRAC, NSW Police, the Australian Criminal Intelligence Commission and other authorities.
The inquiry examined two forms of money laundering – that which seeks to use EGMs to load, “clean” and then withdraw cash to hide its origin and that which involves criminals using the “dirty” cash to gamble. Both are serious offences under the Crimes Act carrying a maximum 15 years imprisonment. (Part 4AC of the Crimes Act 1900 (NSW)).
As part of the evidence gathering, the NSWCC used its special powers to summons witnesses, monitored persons of interest, and extensively analysed data and intelligence holdings across agencies. The October 2022 amendments to Part 4AC of the Crimes Act 1900, which introduced a ‘proceeds of general crime’ offence, are expected to result in more successful prosecutions of people dealing with proceeds of crime in licensed venues in NSW. The amendments were designed to allow more effective prosecution of the most serious money laundering offences conducted by professionals who distance themselves from the profit generating offending, removing the requirement to prove that dirty money was linked to a specific offence.
The Inquiry observed the importance of awareness by club boards, hoteliers and their staff of their anti-money laundering responsibilities which the NSWCC recommended also needs to be addressed with improved legislation and regulations.
The NSWCC has made the following eight recommendations for reform following the investigation. Among them, the introduction of a mandatory cashless gaming card and enhanced data collection measures.
(1) Government to introduce a mandatory cashless gaming system to minimise EGM related money laundering within pubs and clubs.
(2) Government, in consultation with industry and regulators, to create a legislative or regulatory framework requiring certain standardised data be maintained for EGMs to better flag suspected money laundering.
(3) Government to engage with industry to (a) identify ways that collection and analysis of EGM data could be enhanced for the purposes of money laundering identification at a venue level and to improve evidence available for prosecution; (b) explore technical and policy/process solutions to better utilise data collected by EGMs; and (c) identify ways of creating real-time alerts for money laundering flags.
(4) The legislative and regulatory frameworks governing EGMs in NSW to be amended to clarify that persons/entities with functions associated with EGMs must take steps to prevent money laundering.
(5) Government to introduce a mechanism that enables government agencies or venues to recommend the cancellation/revocation of an RCG certification; and a mechanism for the regulator to revoke an RCG certification in appropriate circumstances.
(6) Government to engage with industry and regulators to create a legislative or regulatory mechanism to support the exclusion of persons suspected of dealing with proceeds of crime from venues with EGMs, supplementing the existing rights of venues to exclude patrons from their premises.
(7) Government, in consultation with industry, to update education requirements to include education on money laundering and increase the frequency of the training provided to venues from internal and external sources to support venues in discharging their obligations under the AML/CTF Act.
(8) Government to work with industry to build the sector’s investment in AML/CTF training and education, and secure support for training from external sources.
The Inquiry found (among other things) that:
(1) not all venues with a legal requirement to do so have an AML/CTF program and risk assessment tailored to their circumstances; and
(2) many venue staff lack knowledge and training on AML/CTF issues.
It is important that participants in the sector are vigilant in relation to AML/CTF risks and have in place appropriate compliance and training programs to ensure those risks are mitigated.
Senet regularly works with gaming venues to conduct venue risk assessments, develop and implement tailored AML/CTF compliance programs, and provide bespoke AML/CTF training to venue staff considering the unique risk factors for each venue. Please contact Alexandra Hoskins for more information – e: alexandra@senetlegal.com or m: 0423726904.
Link to the full report: https://www.crimecommission.nsw.gov.au/inquiry-into-money-laundering-in-pubs-and-clubs