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NSW Crime Commission has led a multi-agency investigation “Project Islington”, into the billions of dollars of “dirty” cash that has been money laundered through poker machines in NSW pubs and clubs.

Following inquiries into Crown and Star casinos, there have been growing concerns that the enormity of cash being funnelled through the state’s poker machines has facilitated criminal behaviour.

“At the moment serious offenders can enter NSW pubs and clubs, sit down next to patrons in gaming rooms, and openly feed large sums of cash from their crimes into poker machines with no real fear of detection,” NSW Crime Commissioner, Michael Barnes said.

Every year approximately $95 Billion flows through NSW poker machines making it the gambling capital of Australia.

The findings revealed that only a small proportion of pubs and clubs comply with their money laundering prevention obligations ultimately “rewarding and perpetuating” crime.

The inquiry report also highlighted a detrimental lack of awareness by staff, club boards and hoteliers with recommendations for improved regulations and further legislation across the industry.

The report highlights that there are currently no effective controls or data collection to identify or prosecute those involved in money laundering on the pokies.

“The inquiry has identified the many challenges law enforcement agencies face in targeting this type of money laundering, such as a lack of controls and traceable data,” Deputy Chairperson of the Independent Liquor & Gaming Authority, Murray Smith, Said.

The inquiry examined the different forms of money laundering.

One such form identified involves individuals using electronic gaming machines (EGM’s) to load “clean” and then withdraw cash to hide its origin, where criminals can then use “dirty” cash to gamble.

Under Part 4AC of the Crimes Act 1900 (NSW), this is a serious criminal offence carrying a maximum of 20 years imprisonment under section 193B Crimes Act.

The NSWCC has made 8 recommendations for reform following the investigation carried out with the Independent Liquor and Gaming Authority NSW and the assistance of AUSTRAC and the Australian Criminal Intelligence Commission.

Some of the recommendations include the introduction of mandatory cashless gaming cards and enhanced data collection from gaming machines to help crack down on significant criminal activity.

Current EGM tickets are anonymous, allowing any individual to possibly launder money through the machine with no effective controls to identify or prosecute those involved in criminal behaviour.

The cards will contribute to minimising money laundering associated with EGMs through increasing traceability and reducing the anonymity of transactions.

The recommendations of the report aim to decrease both types of money laundering and provide law enforcement and regulators with the data essential to ensuring other criminal conduct does not replace it.

These reforms will be “valuable tools in breaking the link between organised crime and gaming machines,” Murray Smith said.

“Clearly if I’m a drug dealer wanting to hide cash, I’m not going to voluntarily participate in a scheme that would enable my cash flow to be identified,” Commissioner said.

There has been criticism of the recommendations that the practice of money laundering in NSW pubs and clubs is not widespread.

“We have an industry on its knees post-COVID now being told to introduce an unproven, untested, un-costed and unnecessary cashless system which treats every patron like a criminal,” Australian Hotels Association NSW, CEO John Whelan said.

There has been suggestion that the inquiry revealed that the allegations of allowing money laundering across the industry are unsubstantiated.

“The NSW club industry has been accused of allowing criminal gangs to launder substantial sums of dirty cash through poker machines. Today, the NSW Crime Commission has revealed that those allegations were — and are — completely baseless,” ClubsNSW said.

The Commissioner expressed his confidence and support for the inquiry’s recommendations upholding that if implemented, the impact of serious and organised crime will be reduced in NSW.

By Alyssa Maschmedt.

AUTHOR Criminal Defence Lawyers Australia

Criminal Defence Lawyers Australia are Leading Criminal Defence Lawyers, Delivering Exceptional Results in all Australian Courts.

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