Clubs branded ‘money laundries’ by scandal media

November 30, 2021
Clyde Mooney

The hospitality industry and Associations are again defending the role of pubs and clubs in society, in light of the latest round of naïve finger-pointing by click-bait media.

According to Nine Entertainment (the merged Channel 9 and Fairfax Media) the club and pub industries are in the middle of a money-laundering “scandal”.

Bolstering the argument was citation that MP Shayne Mallard is said to have told NSW Parliament last week that investigators are working with the Crime Commission and Australian Criminal Intelligence Commission to look into “potential money laundering at pubs and clubs”.

The Sydney Morning Herald and The Age, in collaboration with 60 Minutes, claimed “damning new evidence” that millions of dollars is being laundered through the 95,000 gaming machines in NSW.  

Key to the story was CCTV video said to be from a central Sydney pokies venue, which a financial crime lawyer commentates during an interview to explain how it shows a money-laundering syndicate operating. The group is said to be working “with impunity” and dominating the room, around 1am, date-stamped 5 June, 2021. 

Still showing a group of suspicious gamblers from CCTV footage.

The blurred images show a crowded room with machines not typically found in Sydney venues, with no apparent legal smoking solution, despite several patrons smoking and a communal ashtray, and with none of the required compliance signage visible. 

The machines are also not spaced for the required 1.5-metres social distancing.

Part of the selection of images depicts a group of coordinated players working the linked jackpot machines, in a strategy the articles say is chasing “an almost guaranteed jackpot”.

The problem with that is, according to the Australian Gaming Council, it might take 9.7 million spins to win the top prize on a typical gaming machine.

Incongruously, another member of the same outfit is apparently free to launder the cash an easier way. It’s said he feeds $27k into two machines and bets only $1 before cashing it all out as “clean” money.

Another still from alleged money laundering gaming footage aired by 60 Minutes.

The problem with that is, withdrawing winnings greater than $10k requires written documentation and proof of identity. There was no explanation as to why a half-dozen people were chasing a jackpot when it could supposedly be done this way instead.

The footage followed mention of an unidentified “Vietnamese-born woman” dubbed “the cleaner” who is said to have been in the business of cleaning dirty money, washing “at least $38 million, the proceeds of crime” in clubs, pubs and casinos over the past five years.

In general, the breathless expose appears to be trying to perpetuate the wave of delicious scandal that surrounded the recent royal commission into Crown, which echoed the Bergin inquiry in NSW in dismissing claims by the Casino that it had appropriate measures to combat money-laundering (AML) and problem-gambling. 

These investigations have predominantly focused on overseas crime syndicates washing hundreds of millions of dollars through high-roller rooms in casinos.

But faceless Asian organised crime networks, portrayed as profiting from unsavoury illegal activity, have been reputedly “washing cash” at clubs and pubs as well as the big casinos.

Former ClubsNSW employee turned whistleblower Troy Stolz, who worked at the Association from 2011-2019, suggests the industry fears venues will be forced to apply more scrutiny to users of the machines, and that they will find alternative outlets.

And yet central to all the misdoings is apparently the politicians, both Liberal and Labor, who are said to be protecting “the pokies industry” from copping the same scrutiny as casinos.

Throughout the eastern states, it is claimed both sides have benefitted from having “cosied up” to the ominous pokies lobby, presumably due to the oceans of money being provided them.

The ABC reports over $80 million made in political payments, by more than 370 gambling-related donors.

However, this is a total over 22 years, and the average contribution per donor over the time was $203,822, amounting to just $9,265 per year. For this, elected officials are apparently playing the pokies’ game.

The top-four donors were Tabcorp, Crown, Clubs, and the AHA, who disclosed more than $3 million each, amounting to just $136K per year; each of the major parties receive millions in donations each year from a variety of sources.

Commentary from chief gaming investigator David Byrne cited a multi-agency investigation on dirty money through pokies in NSW, which was extrapolated to “more than $1billion” nationwide, although NSW has by far the most machines and highest gaming turnover. 

Byrne says the concept of a cashless card, which was recently rejected in parliament, would be “definitely a disruption” to money laundering. The concept was shot down due to the cost-benefit of retrofitting so many machines, against scant evidence it would be of significant benefit to problem gamblers while decimating patronage by occasional punters.

NSW has 95,000 gaming machines, which are each part of the revenue mix of the roughly 2,300 club and pub venues in which they reside.

Beyond the up to 100k jobs made possible through gaming, and the myriad of people employed and businesses kept viable due to the venues’ operations, the machines will generate in the region of $2.8bn in state taxes this year.

NSW clubs hold over 65k of the machines, generating annual revenue of more than $4.5 billion and paying government close to $1bn in taxes. Pubs in NSW have fewer machines, around 22k, but pay the bulk of the tax.

It should then come as no surprise that the industry associations work hard to maintain the regulations that have put them where they are – generators of vast amounts of tax revenue and providers of employment and community service.

The non-profit ClubsNSW has made no secret of the fact that widescale reform of the industry would send operators broke, in turn hurting the thousands of community sporting clubs and local programs they support. The Association also funded a centralised data system that can be used by authorities to track suspicious play.

Perhaps those privy to the big picture realise that the potential benefits of chasing off accused money-launderers do not outweigh the pitfalls of wrapping pokies in cotton wool.


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