Australia’s financial crimes regulator has launched civil penalty proceedings against Mount Pritchard District and Community Club, alleging serious and systemic breaches of the country’s anti-money laundering and counter-terrorism financing regime.
In a case filed in the Federal Court, AUSTRAC alleges Mounties provided gaming services without adopting and maintaining an AML/CTF program that complied with the AML/CTF Rules.
AUSTRAC CEO Brendan Thomas said the regulator alleges the club’s approach left it exposed to criminal abuse. “Mounties is one of the largest and most profitable club groups in NSW. It owns 10 venues, 8 of which operate approximately 1,400 poker machines and it makes hundreds of millions of dollars in revenue from money gambled on those machines,” Mr Thomas said.
“This is a big company with an even bigger responsibility to ensure its clubs are managing the risks that criminals can run dirty money through its gaming machines.
“AUSTRAC’s 2024 Money Laundering in Australia National Risk Assessment identified pubs and clubs as a medium risk sector, but when those businesses are exposed to cash, especially in circumstances where known money laundering risks are not being managed, the risk increases.”
The regulator says the club’s AML/CTF program was deficient in multiple areas, including risk assessment, staff risk-awareness training, transaction monitoring and enhanced customer due diligence, and that it was not subject to a compliant independent review. AUSTRAC also alleges Mounties failed to appropriately monitor several customers despite the money laundering risks they posed.
AUSTRAC alleges Mounties outsourced aspects of its AML/CTF program to third-party provider Betsafe, which services other pubs and clubs, but failed to ensure the arrangement was fit for purpose. “Like many other AUSTRAC reporting entities, Mounties outsources aspects of its AML/CTF program but what it can’t outsource is its AML/CTF obligations.”
The regulator has also highlighted the broader risks in the cash-intensive gaming sector. “A business operating at this scale, in a cash intensive sector, is exposed to a high degree of money laundering risk. In 2022 for example, the NSW Crime Commission released its Project Islington report which determined that billions of the approximately $95b gambled in NSW poker machines in 2021-22 was likely to be dirty money.”
“Customer due diligence and transaction monitoring in a club that processes hundreds of millions of dollars a year through its poker machines, a significant amount of which is cash, is going to require a robust approach when it comes to verifying a customer’s source of funds,” said Mr Thomas.
It will be for the Federal Court to determine whether Mounties contravened the AML/CTF Act and what orders should be made. Court documents will be published on AUSTRAC’s enforcement actions page when available.
Mounties and Betsafe have been contacted for comment. AUSTRAC has pursued a series of actions across the gambling sector in recent years, including civil cases against Crown Resorts, Star Entertainment and SkyCity Adelaide.
