Billions of dollars in proceeds of crime are being funnelled through clubs and pubs in New South Wales, according to the NSW Crime Commission. Predictably, the industry is claiming it’s not an issue and solutions are too difficult.
This is not a preferred method for most organised criminals, the crime commission says. Sophisticated criminals have other methods. But it is still a sizeable proportion of the estimated $20 billion in criminal proceeds laundered in NSW each year.
In Queensland, you can put only $100 into a poker machine at one time. In Victoria the limit is $1,000. In NSW, newer machines allow $5,000, and older machines up to $10,000. For supposedly harmless suburban fun it’s hard to understand why such sums are allowed.
The findings of the NSW Crime Commission’s inquiry into money laundering via clubs and hotels follow scandalous money-laundering revelations from casino inquiries in NSW, Victoria, Western Australia and Queensland.
Those inquiries found Crown Resorts and Star Entertainment allowed hundreds of millions of dollars to pass through their casinos, in contravention of anti-money-laundering regulations.
Both have been required to undergo extensive “renewal”. They have agreed to adopt cashless gaming to better protect against money laundering.
It’s therefore unsurprising the NSW Crime Commission’s principal recommendation is to introduce a cashless system for all electronic gaming machines in NSW. Also unsurprising is that the industry is focused on why it shouldn’t.
Cashless gambling recommended
The NSW Crime Commission’s report recommends a cashless gambling system for pubs and clubs the same as for casinos – consistent with the identification requirements of Australia’s Anti-Money Laundering and Counter-Terrorism Financing Act.
Electronic gaming cards would record amounts loaded and withdrawn, times, turnover, and losses/wins. The maximum amount of cash able to be loaded on to a player’s account in a single day would be $1,000.
Victoria has already implemented a card-based precommitment system, incorporating most necessary characteristics. Every poker machine in the state is linked to this system. Its flaw is that it is voluntary, allowing those who wish to clean dirty money, or avoid a limit, to simply opt out.
It’s not just about money laundering
Money laundering isn’t the only reason to introduce cashless gaming systems.
On any day in NSW, hundreds of thousands of people are experiencing significant gambling harm, mostly using poker machines. Many hundreds of thousands more – partners, children, employers – are also harmed as a consequence.
A pre-commitment system incorporating all the features of the NSW Crime Commission’s cashless model would stop money laundering and also help those struggling to control their gambling. For those who want to stop it would provide a truly effective gambling self-exclusion system.
A matter of political commitment
The real test here isn’t technology. It’s political will.
NSW Premier Dominic Perrottet has expressed concern at the exploitation of vulnerable people via gambling. Opposition leader Chris Minns has said the crime commission’s report is concerning but will not commit to a cashless card.
ClubsNSW and the Australian Hotels Association are two of Australia’s most powerful lobby groups. According to an ABC investigation, they have doled out about a third of $40 million in political donations disclosed by gambling-related organisations over the past two decades.
In the first six months of 2022 (the most recent data available), people in NSW lost $4 billion using pokies – $2.4 billion in clubs, $1.6 billion in pubs. This is 23% more than the same period in 2019, before pandemic restrictions.
If this continues, political parties will be open to the allegation that they, like clubs, are benefiting from the proceeds of crime.
Pokie operators have billions of reasons to assert this is no big deal. Politicians should take a different view.
- ^ according to (www.crimecommission.nsw.gov.au)
- ^ 86,640 poker machines (www.liquorandgaming.nsw.gov.au)
- ^ $10,000 (www.theguardian.com)
- ^ inquiry into money laundering via clubs and hotels (www.crimecommission.nsw.gov.au)
- ^ NSW (theconversation.com)
- ^ Victoria (theconversation.com)
- ^ $80 million (www.abc.net.au)
- ^ $100 million (www.abc.net.au)
- ^ Star Sydney suspension: how do casino operators found so unfit get to keep their licences? (theconversation.com)
- ^ Now Sydney has two casinos run by companies unfit to hold a gaming licence (theconversation.com)
- ^ Anti-Money Laundering and Counter-Terrorism Financing Act (www.legislation.gov.au)
- ^ has said (www.abc.net.au)
- ^ since 2009 (nla.gov.au)
- ^ since 2013 (aifs.gov.au)
- ^ precommitment system (www.yourplay.com.au)
- ^ to simply opt out (www.justice.vic.gov.au)
- ^ hundreds of thousands of people (www.responsiblegambling.nsw.gov.au)
- ^ partners, children, employers (www.tandfonline.com)
- ^ has promised to implement (www.abc.net.au)
- ^ Responsible gambling – a bright shining lie Crown Resorts and others can no longer hide behind (theconversation.com)
- ^ exploitation of vulnerable people (www.smh.com.au)
- ^ said the crime commission’s report is concerning (www.theage.com.au)
- ^ ABC investigation (www.abc.net.au)
- ^ memorandums of understanding (www.smh.com.au)
- ^ most recent data (nswgov.sharepoint.com)
- ^ on its knees (www.afr.com)
- ^ 4 gambling reform ideas from overseas to save Australia from gambling loss and harm (theconversation.com)
- ^ not for profit (www.elections.nsw.gov.au)
Authors: Charles Livingstone, Associate Professor, School of Public Health and Preventive Medicine, Monash University