AUSTRAC Focuses on Clubs' Pokies in $70 Billion AML Offensive

Australia's financial crime watchdog, AUSTRAC, will target the estimated $70 billion fed into poker machines in NSW clubs each year, as part of its latest initiative to crack down on the laundering of dirty money in the gambling industry.

According to new AUSTRAC chief executive Brendan Thomas, three out of four of the almost 90,000 pokies in NSW are in clubs, many of which are "massive" and rival Sydney's Star casino. 

Thomas stated: 

We're having a look at the clubs sector in a much more focused way. They're quite substantial with lots of money flowing.

Mr Thomas also warned that Australia's back door was "swinging wide open" to drug dealers, human traffickers and murderers because financial crime laws do not cover lawyers, accountants and real estate agents. With Thomas emphazing the urgent need for changes to anti-money laundering and counter-terrorism financing (AML/CTF) laws to avoid the economy-damaging effects of being "grey-listed" in the global financial system.

 Until we do that, we are still going to have significant risk and a significant challenge to criminals exploiting our financial system.

Citing the growing threat posed by criminal gangs using pokies to launder cash, he said the more than 1000 clubs operating in NSW required greater scrutiny of their operations, Thomas went on to add:

We've had work done by the NSW Crime Commission that's talked about the risk exposure of clubs and gaming to money laundering and organised crime. It's not just about education, it's about compliance as well.

A NSW Crime Commission-led review in 2022 found it could not tell how much of the $95 billion fed through pokies in the state annually were proceeds of crime, but it was "many" billions, primarily from drug dealing.

NSW clubs have about 74 per cent of the state's roughly 90,000 poker machines, suggesting their share of the annual churn is about $70 billion. After player returns, the clubs rake in $4.6 billion in pokies revenue, according to data from the NSW government Department of Enterprise, Investment and Trade. 

The Bankstown Sports Club, for example, booked $102 million in gambling revenue from 745 poker machines in 2022-23. Gambling income made up more than 70 per cent of the club's revenue, according to its annual report.

The move against NSW clubs comes after AUSTRAC whacked the country's biggest casino operators with a series of high-profile lawsuits over the past three years. In 2022, the watchdog launched Federal Court action against casino operators Star Entertainment and SkyCity, alleging serious and systemic failures to comply with AML/CTF laws. 

In 2023, the Federal Court ordered Crown Resorts to pay a $450 million penalty over two years after similar proceedings against the company and its Melbourne and Perth casinos.

Earlier this year, AUSTRAC launched an enforcement investigation into Bet365, the second international bookmaker to be probed. Rival Entain, which runs Neds and Ladbrokes, is waiting on the outcome of a separate investigation into whether it breached financial crime laws.