AUSTRAC Announces the Launch of New Gambling AML Unit

During a global gaming industry conference held in Sydney from March 6 to 10, the Australian Transaction Reports and Analysis Centre (AUSTRAC) announced the launch of a new specialist unit to combat the rising threat of money laundering in the gambling sector. Serious non-compliance throughout the sector has previously been noted by AUSTRAC, with casino operator Star Entertainment receiving a record fine of $100 million in November 2022.

The creation of the new anti-money laundering (AML) unit means there are now two specialist teams in Australia dedicated to helping industry officials better detect and prevent money laundering through gambling.

Australia’s High-Risk Gambling Industry

The new AML unit follows a string of recent investigations centered around compliance failures across multiple betting and gambling facilities. A few months before Star Entertainment received a financial penalty, AUSTRAC started federal proceedings against the country’s largest casino operator, Crown Resorts. Crown’s alleged failings include not undertaking appropriate ongoing customer due diligence (CDD) on high-risk customers and not having a risk-based transaction monitoring program to identify suspicious activity.

In November 2022, Sportsbet and Bet365 also became subject to investigation following suspicions of failing to meet AML and counter-terrorism financing (CTF) obligations. In each case, AUSTRAC gave external auditors 180 days to report back to the regulator on whether the betting agents undertook appropriate risk assessments. Speaking about the investigation, AUSTRAC CEO, Nicola Rose, said the proceedings should speak volumes to the whole industry about “lifting up their game.” 

Furthermore, in December 2022, AUSTRAC commenced civil penalty proceedings against SkyCity Adelaide for alleged “serious and systemic non-compliance”. Similar to Star Entertainment, it is alleged that SkyCity failed to include appropriate risk-based systems and controls in its AML/CTF program.

Lengthy Proceedings Reprimanded

While proceedings against Crown Resorts, SkyCity, Sportsbet, and Bet365 are ongoing, some – including a federal judge – have criticized the length of time it has taken AUSTRAC to prosecute. 

Responding to the criticism, Hodge acknowledged that Crown Resorts had yet to make any formal admissions despite lengthy talks but the regulator was “very serious about running this case.” Crown’s barrister, Kane Loxley, also said his client was “very likely” to admit breaches regarding its programs.

AUSTRAC’s Supervisory Campaigns

AUSTRAC’s move to instate a new gambling AML unit forms part of a wider trend of the regulator paying closer attention to the finances of businesses across high-risk sectors. Rose articulated this at FINSIA’s “The Regulators” event in May 2022, saying AUSTRAC will “educate and raise awareness of risks and AML/CTF obligations to nearly 300 pubs and clubs as well as bullion dealers, betting agencies and bookmakers, remitters and regtech/AML advisors.”

From 2021 to 2022, the regulator also conducted 11 supervisory campaigns involving over 150 reporting entities. These campaigns covered a range of industry sectors, two of which had an intersection with the gambling industry: bookmakers and pubs and clubs. In each campaign, AUSTRAC assessed how firms could improve their AML protocols and standards.

Key Takeaways

Compliance staff should ensure they are familiar with the guidance provided by AUSTRAC that relates to gambling and betting facilities. These advisories should be reviewed in detail, noting the best practices that are highlighted for risk assessments, ongoing monitoring, threshold transaction reporting, and record keeping. Some relevant materials include:

• Regulatory Guide for Pubs and Clubs with Gaming Machines
• Preparing and implementing an AML/CTF program: pubs and clubs sector
• Worked examples for the online wagering industry