As published in the Daily Telegraph, March 23, 2021.
The stats show that NSW Clubs are not fervent territory for organised crime but the need for National Commissioner is still paramount, Hugh McDermott writes.
The adverse findings against Crown Casino and the resulting recommendations of the Bergin Report have shone a light on the illicit activities of transnational organised crime’s use of Australia’s gaming industry for money laundering.
Quite rightly, much public criticism has continued to target the incompetent compliance oversight by Crown’s Board and the lack of enforcement by government regulators. Legislators must now face what action needs to be taken to stem the growing influence of organised crime in our gaming industry.
Sadly, there has also been criticism and misleading claims regarding the level of money laundering within the NSW clubs and hotels industry.
Melbourne’s Crown Casino. Picture: NCA NewsWire/ Luis Ascui
Crown Casino in Melbourne. Picture: NCA NewsWire/ Luis Ascui
These false claims have led to a misdirection in anti-money laundering measures by policy makers and government. Central to this commentary has been the demand for the introduction of a cashless gambling card within NSW Clubs as a means of combating money laundering in gambling venues.
The Bergin inquiry focused exclusively on the suitability of Crown to hold a casino licence and the regulatory regime for casinos. The inquiry did not assess or make any recommendations about the money laundering risks in clubs and hotels.
The Bergin Report did not recommend the introduction of a cashless gambling card.
The scale of money laundering at Crown could not occur in NSW Clubs due to strong identification requirements when entering a club, the absence of casino junkets and, rarer, large payouts which all make clubs much less attractive to organised crime.
A 2015 report by Australia’s anti-money laundering regulator AUSTRAC identified only 38 of the 5837 high-risk reporting entities are clubs or pubs.
Given the thousands of clubs and hotels that operate gaming machines across Australia, this report indicates the overwhelming majority have little, if any, risk. It is also worth noting that anti-money laundering laws require reporting entities to identify customers prior to doing business with them.
AUSTRAC has exercised its powers to exempt gaming machine venues from this requirement – which it has discretion to do if the risk is low enough – demonstrating AUSTRAC’s own assessment of a low risk for target money laundering in these venues.
After months of advocating for the introduction of a cashless gambling card in NSW Club venues, the NSW Minister for Customer Service Victor Dominello has finally come to the realisation he has been selling a lie and dropped the idea.
NSW Liberal Minister for Customer Service Victor Dominello during Budget Estimates. Picture: NCA NewsWire / Dylan Coker
Hugh McDermott is the Member for Prospect. Picture: AAP
This was time and taxpayer’s money wasted when his government’s efforts should have been focused on targeting those industries in which money laundering is a serious concern.
In Australia, lawyers, accountants, real estate agents and luxury car sellers are identified by both AUSTRAC and internationally by the OECD’s money laundering body, the Financial Action Task Force (FATF), as the highest risk sectors for money laundering because they are used by corrupt government officials and organised crime groups to wash the proceeds of their crime.
While other countries extended anti-money laundering laws to these ‘gateway’ services years ago, NSW, nor any other state, does not.
Australia’s report card from the OECD experts in 2015 and again in 2018 reveals a glaring problem of a “non-compliant” rating for the money laundering risk of these groups.
This failure was once again highlighted before a recent Senate Estimate Hearing. The Government’s inaction has only strengthened the grip of money launders on these professions. This is where the government must focus its anti-money laundering actions, not our local pubs and clubs. Focusing on NSW Clubs as a soft target has been a distraction from the more important work of addressing the regulatory vacuum on “gateway” services.
Hugh McDermott MP is the Chair of the State Parliamentary Labor Party Legal Affairs Committee.