While the level of AML/CTF compliance in clubs and pubs across Australia is very high, the recent developments in the external investigation commissioned by ILGA in NSW into Crown casino has the potential to cause problems for the wider industry. It is important to note that casinos operate under very different regulations to clubs and hotels, and Crown Sydney was only supposed to be a VIP casino with table games, not poker machines. Unaware of the invasion of privacy and curtailment of personal freedoms that a mandatory government issued gambling card system would imposed for the 99% of average club and hotel customers that don’t have gambling issues, the anti-gambling lobby groups have used the report’s reference to a card system being an appropriate way to resolve money laundering issues as an underhand way of limiting gambling. (Ed).

ABC story (abridged)

With a business model based on an oversupply of losing gamblers, Crown has been on a winning streak since the 1990s.

But when the Bergin Inquiry report was tabled in NSW Parliament this week, the company’s directors got an insight into what it was like to end a night at the casino with the arse out of your trousers and no cab fare home.

Few public inquiries have skewered a corporate giant like Bergin has done to Crown, and the pain is not over yet.

When the NSW Independent Liquor & Gaming Authority (ILGA) meets on Friday it will consider the report it commissioned and start weighing up whether Crown Resorts is a fit and proper company in its current form to run a high-roller casino in Sydney’s shiny new Barangaroo precinct.

Invariably, regulators in Victoria and Western Australia will be asked questions about Crown-run casinos in those states. Like why has Crown been considered fit to operate in marvellous Melbourne, yet is seemingly too hot for sinful Sydney?

But there’s another sector of Australia’s all-powerful gambling industry that might start drawing some unwanted attention as well.

What it means for pokies

Buried like a land mine on page 620 of the report was a finding by Commissioner Patricia Bergin that could cause grief for the pubs and clubs in NSW that are home to more than 90,000 poker machines.

In October last year, the NSW minister responsible for gambling, Victor Dominello, said he was considering introducing a government-issued gambling card for all poker machine players.

The idea was that gamblers would pre-load their card with the amount of money they were prepared to lose. Because the card would be linked to an individual’s ID, the minister argued, it would not just minimise harm to problem gamblers but reduce money laundering as well.

In her report, Commissioner Bergin made it clear she thought Mr Dominello’s proposal would help address one of the key issues she wanted dealt with — money laundering by organised criminals.

“The proposal has been the subject of some public debate and is not free from controversy,” she wrote. “However, it appears that the very significant utility of the card to assist the problem gambler could not be in issue. It is also obvious that it would be a powerful mechanism to assist in combatting money laundering.”

Since the publication of the Bergin report, Phillip Crawford, the chair of the NSW regulator, ILGA, has urged the Government to back the gambling card.

“It’s a terrific way in which to shore up the issue of money laundering by organised crime,” he said.

Mr Crawford is concerned that if the focus is just on casinos laundering money, the practice will continue to flourish elsewhere.

“We don’t want it washing into the suburban pubs and clubs because it is a big industry. You’ve seen the numbers in Bergin and its massive, so it’s something we want to attack as a regulator.”

“We think it’s legitimate and we’ve got a minister who is committed to it. The stars are aligning. Let’s use the opportunity and the momentum for some really good change.”

Powerful lobby group may have hit a snag

Australians lose close to $13 billion a year through poker machines. Previous attempts to introduce harm minimisation measures such as mandatory pre-commitment and maximum $1 bets have been killed off after aggressive campaigning by the powerful lobby groups ClubsNSW and the Australian Hotels Association (AHA).

ClubsNSW has already been lobbying ministers and backbenchers to overturn Mr Dominello’s proposed reforms and the industry group has friends in high places. One senior Liberal MP told ABC Investigations that some members of the NSW Liberal and National party rooms were “captured” by the gambling industry.

When asked about the gambling card, a spokesman for ClubsNSW said in a statement: “Commissioner Bergin made a passing reference to the controversial concept of a mandatory, government-issued gambling card in her 800-page report on Crown. While it might sound to some like a harmless regulatory intervention, a mandatory gambling card would present considerable unintended consequences.”

While in the past it might have been easier for lobby groups to see off harm-minimisation proposals, killing off a policy that Commissioner Bergin and Mr Crawford think will help combat money laundering by organised crime figures might be more difficult. What politician wants to open themselves up to the accusation they are soft on crime?

You can bet Mr Dominello will be using the Bergin Inquiry findings and Mr Crawford’s backing to garner support inside Cabinet to support his gambling card. He will need every argument at his disposal to convince his colleagues, and money laundering will be his strongest hand.

The minister is taking on one of the most powerful lobby groups in the country, in the state with the most poker machines, bringing in a reform that no other state has been game to try, and he has to get it past colleagues who believe pubs and clubs make a significant social and economic contribution to the state off the back of poker machine money.

Because there has been no trial of a mandatory card in Australia, it’s hard to weigh up whether it would work. The stakes are high.

Source: http://Crown inquiry could also spell trouble for NSW pubs and clubs and their 90,000 poker machines – ABC News

In a related story (also ABC news):

NSW Deputy Premier and Nationals leader John Barilaro disagreed with mandatory government card system for gambling. Mr Barilaro said he would not support the cards, and that it was “not the time to strangle pubs and clubs with red tape”.

“We are doing our best to help pubs and clubs because they do a magnificent job in the community but there is that seedy underbelly of cash, poker machines and gaming that Commissioner Bergin has pointed out that needs to be addressed because we cannot turn a blind eye to organised crime.”

Premier Gladys Berejiklian told Channel Nine there was room for both a hard-line on money laundering and supporting pubs and clubs.

“What the report has highlighted is that unfortunately there could be issues in the broader community about money laundering and we need to get on top of that and of course we need to support all of the businesses in the process — I think you can do both.”

Source: http://NSW Deputy Premier John Barilaro breaks with NSW Government over cashless gambling cards after Crown casino report – ABC News