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‘Inexplicable’ 20 per cent jump in pokie bets fuels money laundering concerns

Betting on poker machines by NSW gamblers grew by more than $1.3 billion last year as new figures show the amount staked on the machines in some parts of Sydney’s west leapt by “inexplicably” large amounts lending credibility they are vehicles for criminals to launder illicit profits. 

Eighty billion dollars was staked on poker machines last financial year, new figures show, with pubs and clubs raking in nearly $120 million more in losses than last year.

Fairfield once again topped the list of local government areas when measured by the amount wagered; residents put $8.4 billion through the area’s gaming machines.

That is growth of 20 per cent on $6.99 billion wagered in 2013/14. The council area’s population grew by 2 per cent in the same time.  

“That is astonishing,” said Francis Markham a researcher from the ANU who specialises in geographical trends in gambling losses and who described the growth as as “inexplicable”.

The amount being staked by gamblers is growing more quickly than the amount they lose, the data shows (or the amount hotels make, the data suggests), stoking suspicion the machines are used to wash illicit funds.

“[Last year we had a] 75 per cent increase in the number of pubs and clubs that submitted suspicious [activity] reports,” a spokesman for the federal anti-money laundering agency said. AUSTRAC has been targeting pubs and clubs as part of an education campaign to clampdown on suspicious transactions, one being joined by the state government which this month turned on a network designed to monitor tens of thousands of machines for suspicious trends. 

But experts say about half of all money lost on the machines remains lost by people who are addicted to gambling. 

The Greens’ gambling harm spokesman, Justin Field MLC, said internal projections showed the state government was forecasting a more than $185 million windfall from gambling losses, proving its “responsible gaming” campaigns were designed to fail.

“The NSW government’s messages promoting ‘harm minimisation’ and ‘responsible gambling’ are not credible when we see at the same time they are projecting huge profit increases,” he said.

The Greens-obtained data suggests the government forecasts poker machine losses will grow by a half-billion dollars to 2020.

About half of all money lost on poker machines is by problem gamblers, researchers say.

Fairfield was overtaken by the total amount lost on poker machines (a measure distinct to wagering) by the newly merged mega-council, Canterbury-Bankstown, which recorded $60 million more total losses at $540 million last year.

But analysis by Mr Markham shows on a per capita basis. Fairfield loses $2300 for each resident compared to $1600 to Canterbury-Bankstown in second place. In NSW, gambling losses reached a peak of more than $1250 per person in 2005 and have steadily declined since to reach a little more than $950 in 2015. 

“It’s head and shoulders above the rest,” Mr Markham said. 

Fairfield residents also staked more than $40,000 each on average, or nearly twice the amount of Canterbury-Bankstown residents who put through less than $22,500.

A senior police source said money laundering by drug dealers had a long history in Fairfield. The method typically involved recruiting problem gamblers and offering them a percentage of money to wash through machines, other methods reportedly employed include offering to buy winners’ cheques at a premium.

Liquor and Gaming NSW calculates that the average poker machine returns 90¢ to every player for every dollar waged.

But Fairfield and Canterbury-Bankstown had average rates of 94 and 93 per cent.

“Most gamblers don’t have a sense of the [loss percentages of the machines] they’re playing,” Mr Markham said. “But a rational money laundering outfit would have a very acute sense of the [percentage loss] of the machine they’re playing”.

The new data comes as federal MP Andrew Wilkie said under parliamentary privilege last year that whistleblowers alleged Crown Casino in Melbourne had facilitated money laundering by allowing big players to switch ID cards so that transactions greater than $10,000 were not reported. Crown vigorously denies the claims. 

The former minority Gillard government famously reneged on a deal with the cross-benchers to lower the rate at which winnings need to be reported to money laundering officials to $1000 and a $250 limit on ATM withdrawals in venues.  

“Pokies are being used to provide a high-speed washing and drying service,” Mr Xenophon said last year. “If you’ve just done a crystal meth deal, you could launder proceeds of that through the pokies, because the reporting requirements are so anaemic,” he said.

A spokesman for the Independent Liquor and Gaming Authority said it had begun to monitor possible money laundering more closely with a new network and algorithm designed to detect suspicious transactions automatically.

“Our new Centralised Monitoring System, which commenced operation last month, connects 93,000 electronic gaming machines in more than 2600 venues,” the spokesman said.

with Dan Proudman

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