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State of Financial Crime 2023 Report

New South Wales Aims to Make Poker Machines Cashless by 2028

Gaming & Gambling Latest News

The Liberal and Nationals Government of New South Wales (NSW) has unveiled its plan to make all poker machines in the state cashless by 2028, following an inquiry by the NSW Crime Commission. According to the state’s Premier Dominic Perrottet, the $344 million policy will legislate breaks for players and allow friends and family members to apply for somebody to be barred from “pokies” if they display “problem gambling” behavior. A state-wide exclusion register has also been proposed.

To begin implementing the reforms, a “transition taskforce” will be established in April 2023 to protect the economic viability of venues across the state and monitor delivery against the roadmap.

The five-year plan

According to the Australia Institute, one-fifth of the world’s one million legal poker machines can be found in Australia, half of which are in NSW. To combat money laundering in the electronic gaming sector, Perrottet says the switch to cashless poker machines “solves problem gambling, solves money laundering, protects jobs and industries”. Additionally, the government says the reforms will enable law enforcement to better identify and respond to financial crime and will improve data analytics around gambling and money laundering. 

The NSW government’s five-year plan includes the following actions:

  • Introducing mandatory cashless gaming in NSW across all venues
  • Legislating for December 31, 2028, to be the date by which the full transition to cashless gaming must be complete
  • Requiring any new cash machine purchased after July 2023 to have a load-up limit of $500, compared to the current $10,000 limit
  • Enabling player identity verification to be linked to a single bank account
  • Ensuring funds for gaming come from a bank account rather than allowing credit to be used 
  • Ensuring personal player data can only be used for law enforcement
  • Legislating the best possible player privacy protections for all system-generated data

Money laundering via EGMs

In October 2022, the NSW Crime Commission published the results of its Inquiry into Money Laundering via Electronic Gaming Machines (EGMs) in Hotels and Clubs. According to the report, approximately $95 billion was gambled through EGMs in hotels and licensed clubs in NSW from 2020 to 2021 with a “significant amount” of the funds estimated to be the proceeds of crime.

To minimize money laundering associated with EGMs, the NSW Crime Commission recommended the implementation of mandatory cashless gaming as it would remove anonymity and increase the traceability of EGM-related transactions. Additionally, the report outlined the following recommendations for the NSW government:

  • Identify ways of creating real-time alerts for money laundering flags
  • Create a legislative or regulatory framework that requires certain standardized data be maintained for EGMs to better flag suspected money laundering
  • Work with industry to build the sector’s investment in AML/CTF training and education and secure support for training from external sources
  • Explore technical and policy/process solutions to better utilize data collected by EGMs

The NSW government’s five-year plan aims to support all of the recommendations laid out by the commission.

Key takeaways

Firms with clients related to gambling businesses should be careful to ensure their customer due diligence (CDD) investigations go beyond basic know-your-customer (KYC) policies to better manage risks that may occur.

Compliance staff should also familiarize themselves the gambling sector guidance published by the Financial Action Task Force (FATF), paying close attention to the money laundering indicators explored in chapter two. In the report, countries and their national authorities are reminded to establish a partnership with casinos and other designated non-financial businesses and professions (DNFBP) sectors to combat money laundering and terrorist financing. The FATF also calls out casinos in its updated AML/CFT standards, stating that “casinos should be subject to a comprehensive regulatory and supervisory regime that ensures that they have effectively implemented the necessary AML/CFT measures.” 

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Originally published 16 February 2023, updated 17 February 2023

Disclaimer: This is for general information only. The information presented does not constitute legal advice. ComplyAdvantage accepts no responsibility for any information contained herein and disclaims and excludes any liability in respect of the contents or for action taken based on this information.

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