AUSTRAC Ramping Cooperation With Gambling Industry

March 12, 2024
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Australia's once-inscrutable financial transactions regulator AUSTRAC has revealed a comprehensive and collaborative strategy to hold gambling entities accountable for anti-money laundering responsibilities, while promising “targeted checks” across most industry segments.
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Australia's once-inscrutable financial transactions regulator AUSTRAC has revealed a comprehensive and collaborative strategy to hold gambling entities accountable for anti-money laundering responsibilities, while promising “targeted checks” across most industry segments.

Brad Brown, AUSTRAC national manager of regulatory operations, said on Monday (March 11) that the regulator is combining collaboration and education with investigation to improve oversight of an industry whose reputation for compliance has taken a battering.

Brown told the Regulating the Game conference in Sydney that AUSTRAC established a casino working group in May 2023 as part of a public-private intelligence alliance to “promote information sharing and build a national picture of money laundering and criminal vulnerabilities in the criminal sector”.

The initiative brought together AUSTRAC officials, law enforcement and other government agencies, and representatives from all Australian casinos.

The group is co-chaired by AUSTRAC and Crown Resorts, one of the land-based industry’s worst offenders in recent years, before receiving massive fines and undergoing purges of ownership and management.

The alliance meets every second month, and “shares challenges, risks, and generates potential solutions to the risks they face”, Brown said.

For larger casino operators, AUSTRAC’s focus for 2024 will be “conducting targeted checks of those larger casinos to ensure that casinos are now capable of identifying, mitigating and managing their money laundering and terrorism financing risk following the uplift programs they have put in place”.

From an investigative standpoint, AUSTRAC has a supervisory team focused on casinos and bookmakers, and a separate team dedicated to pubs and clubs, he said.

“A major part of our current focus is on ensuring the gambling sector [has] learned the lessons of our previous work,” he said.

“In this regard, we have been, and we will continue to conduct compliance engagements and assessments across a range of entities.”

A senior gambling industry source told Vixio GamblingCompliance that he was impressed by “AUSTRAC's commitment to enforcement of AML obligations on the gaming industry”.

“It's not something I can recall AUSTRAC being so bullish about before,” he said on Monday.

“What stuck with me was a specific comment he made about specialist teams within AUSTRAC working ‘with’ the industry.

“In itself, that could be a good thing but needs to be tempered by the concern of regulatory capture.”  

As for smaller casinos, Brown warned that they should indicate in their dealings with AUSTRAC that they have “incorporated lessons into their business”, and that they are aware of industry enquiries and shifts in public expectations.

“And we are seeking from them as to whether they have embarked on similar journeys to larger operators in terms of changes to culture and money laundering and terrorism financing risk appetite.

AUSTRAC has launched at least two “enforcement investigations” into corporate bookmakers, with a probe into Entain in September 2022 followed this month by confirmation of a probe into bet365 over anti-money laundering and counter-terrorism financing (AML/CTF) deficiencies.

The outcome of an AUSTRAC-ordered external audit into Flutter-owned Sportsbet, Australia’s leading online bookmaker, could trigger a third such investigation.

But AUSTRAC has been working to combine investigating pressure with education and deterrence, Brown said.

“We met with each corporate bookmaker enrolled with AUSTRAC to share with them lessons of our campaign that was conducted throughout 2021 and to clearly articulate our expectations for this sector,” he said.

“So during 2024, for corporate bookmakers, we will assess a number of operators to ensure that the lessons learned have been applied.”

As for Australian pubs and clubs, home to the world’s heaviest concentration of slot machines, AUSTRAC has declared the segment will “remain a significant focus” in 2024.

Brown said the regulator has “particular concerns” with electronic gaming machines “around the identification of risks, with many pubs and clubs continuing to be reliant on manual transaction monitoring”.

He also cited a lack of specificity for AML/CTF programs for individual venues, and a wider lack of understanding of requirements under the law.

Meanwhile, compared with a year ago, the relationship between AUSTRAC and federal and state gambling regulators appears to be improving after years of reports of poor communication.

Brown thanked federal and state gambling regulators during his Regulating the Game presentation, adding that AUSTRAC has worked to provide “ongoing education and training sessions around AML/CTF” to his regulator counterparts.

“We have regular operational meetings, we have ad hoc tactical discussions on specific matters, and on several occasions in the last year we have actually undertaken joint assessment activity of different venues.”

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