Pressure mounts on Minns for gambling royal commission

The head of the Independent Liquor and Gaming Authority warned the NSW government two years ago that organised crime was moving money laundering activities from The Star casino into pubs and clubs and called for greater resources to investigate – months later the opposite occurred.

The revelation contained in documents released this week has prompted Greens MLC Cate Faehrmann to write to Premier Chris Minns requesting a royal commission into the gambling industry in NSW.

ILGA raised concerns about level of suspicious gaming in pubs and clubs in 2021.Credit: Flavio Brancaleone

Independent Sydney MP Alex Greenwich has also called for clubs operating more than 250 gaming machines to be regulated by the NSW Independent Casino Commission.

The documents released to parliament show that then-ILGA director Phil Crawford flagged a “very troubling” level of suspicious gaming activity in pubs and clubs and made recommendations that were never enacted by the then-Perrottet government.

Now, Minns is being pressured to increase scrutiny of the sector.

In November 2021 Crawford wrote to then-gaming minister Victor Dominello with concerns that money laundering was just as prevalent in hotels and registered clubs as the casino, if not more so, but that they were governed by a weaker regulatory regime and the authority did not have the power to adequately deal with it.

Liquor and Gaming NSW is the regulatory agency and brings disciplinary complaints, while ILGA is the decision-making authority, and they operate independently of each other.

The Greens’ Cate Faehrmann is calling for a royal commission into the gambling industry.Credit: Dominic Lorrimer

In a second letter, dated December 10, 2021, Crawford requested six immediate interventions to address money laundering in pubs and clubs, including additional resources for the investigative unit to focus on money laundering, funded by an industry levy.

But Dominello – who had already supported Liquor and Gaming NSW to upscale investigations into money laundering – lost the gaming portfolio in a cabinet reshuffle 11 days after the second letter, and Nationals MP Kevin Anderson was installed in the role.

Four months later, L&GNSW transferred its investigative and intelligence staff who had been working on money laundering to another agency, and withdrew its complaints against venues under investigation for allowing money laundering to occur on their premises. It determined it had no remit to prosecute breaches of anti-money laundering laws.

Sydney MP Alex Greenwich says clubs with a large number of poker machines should be regulated by the casinos commission.Credit: Dominic Lorrimer

Greenwich said the unwillingness of L&GNSW to take money laundering seriously was reason to transfer authority to the NSW Independent Casino Commission (NICC), which was already regulating two casinos.

“It is clear that clubs are operating like casinos and the larger ones should be regulated by the NICC to ensure appropriate compliance and enforcement measures.”

Anderson said he had no recollection of being briefed on Crawford’s correspondence. Crawford, who is now chair of the NICC, declined to comment.

Faehrmann wrote to Minns on Friday requesting his support for a royal commission into the conduct, integrity and influence of the gambling industry in NSW. The terms of reference would include the nature of the industry’s influence over politicians and decision-makers, and the existence or potential for corruption among government agencies in enforcing industry compliance.

“The fact that this information has been suppressed for so long is incredibly concerning and suggests interference within the highest levels of government, and possible corruption within the executive and multiple registered clubs,” Faehrmann said.

“Nothing short of a royal commission is needed.”

The release of the documents also comes as Independent Murray MP Helen Dalton is due to give notice of her bill for cashless gaming to be immediately mandated in pubs and clubs. The government has appointed an independent panel to oversee a trial of cashless gaming, to assess its feasibility.

The NSW Crime Commission instigated its own investigation into the nature and extent of money laundering in pubs and clubs the day before Dominello was axed as gaming minister. It reported in October 2022 that the amount of dirty money being ploughed through the state’s poker machines was significant, though it was generally gambled away rather than cleaned.

L&GNSW referred questions to ILGA on why it did the opposite to what Crawford had suggested in terms of allocating more resources to its investigations unit.

ILGA said board members have always proactively engaged with members of parliament and other stakeholders to better protect communities from the harms associated with gaming and alcohol consumption.

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