Earth to Macquarie Street: How much more evidence is needed on dirty money and pokies?

Dirty money is like a tide that once blocked, inundates the nearest low-lying area. So little wonder then that the one-sided regulatory crackdown on laundering money at casinos has seen cash flow into waiting poker machines at NSW pubs and clubs.

AUSTRAC, the financial crime watchdog and regulator of currency exchange services, has launched civil proceedings against Mount Pritchard District and Community Club, also known as Mounties, the most profitable club group in NSW, for “serious and systemic” non-compliance with anti-money laundering laws, and warned that the illicit activity was migrating from casinos to pubs and clubs.

Research has shown mandatory cashless gaming cards at pokies venues would hinder money laundering.Credit: Nick Moir

Mounties is the first club to be targeted by AUSTRAC in its crackdown on money laundering through pubs and clubs, which follows proceedings against casinos, bookmakers and online betting platforms.

NSW politicians have been jockeying around on poker machine reform since late 2022, when the NSW Crime Commission delivered a damning report that found a significant amount of dirty money was being washed through pokies. In the approach to the state election, then-premier Dominic Perrottet promised that all NSW poker machines would be cashless by the end of 2028, but then-opposition leader Chris Minns undercut the Coalition policy, vowing to only hold a cashless gaming trial, buy back some poker machines and increase the forfeiture rate.

Subsequently, Minns in office opted to test cashless technology before committing to a statewide rollout, but the trial attracted just 14 participants, and the government is still sitting on a recommendation from its gambling reform panel to make cashless gambling mandatory; further, the premier suggested last month that the government would not adopt the recommendation.

“It hasn’t worked, it’s not driven down the incidence of problem gambling, the take-up rate has been lower than we thought, the cost of compliance is enormous, astronomical,” Minns said.

But blending the misery inflicted by problem gambling with money laundering through poker machines is fusing two problems needing quite different fixes: one is a Hydra-headed social problem that requires a whole-of-government approach, while the other is the government’s failure to stop money slipping through its fingers.

In December 2022, the NSW Crime Commission recommended the introduction of mandatory cashless gaming to reduce the proceeds of crime churning through poker machines. NSW Crime Commissioner Michael Barnes said pubs and clubs could no longer plead ignorance to dealing in the proceeds of crime if they continued to draw revenue from criminals. Peak bodies and some MPs pushed back at the time, arguing money laundering was not a major issue for the industry.

The latest AUSTRAC warning puts the lie to such claims.

Dirty money shifting from casinos to clubs and pubs sends a strong message to Macquarie Street that the problems identified by the Crime Commission three years ago have not gone away. The social problems still remain and government is frozen with inaction against special interest groups despite losing out big time from money laundering. How much more evidence is needed before the Minns government gets serious on gambling reforms?

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