AUSTRAC, Australia’s anti-money laundering and counter-terrorism financing (AML/CTF) regulator, remains focused on the gambling sector, including pubs and clubs, and the important role that advisors and independent reviewers play in supporting compliance. Venues can reduce their compliance risk by ensuring that their AML/CTF framework and the work of their independent advisors satisfies the increasing expectations of the regulator.

Authors: Alexandra Hoskins, Principal / Daniel Lovecek, Principal

By the end of March 2025, gaming venues across Australia with entitlements to operate 16 or more gaming machines will need to have submitted their AUSTRAC Annual Compliance Report. This report sets out a range of compliance information about the venue, including whether the venue has completed an independent review of their AML/CTF program. Venues are required to have an independent review of their AML/CTF program and money laundering and terrorism financing (ML/TF) risk assessment at regular intervals.

AUSTRAC recognises the “benefits and efficiencies” that independent AML/CTF advisors and consultants provide to reporting entities through their products and services. These services can include:

· Helping businesses understand ML/TF risks specific to their sector and operations.

· Providing advice on AML/CTF obligations.

· Assisting to develop a tailored ML/TF risk assessment for your business.

· Assisting to develop a tailored AML/CTF program for your business.

· Training staff on AML/CTF compliance.

· Conducting independent reviews of AML/CTF programs.

While outsourcing AML/CTF compliance activities to independent advisors can be an effective way for venues to meet their obligations, it is essential that venues conduct proper due diligence when selecting a provider and are attentive to obligations that cannot be delegated. Not all advisory services offer the same level of expertise or depth of analysis, and choosing the right provider can make a significant difference in the quality and effectiveness of an AML/CTF program. Following recent compliance assessments, AUSTRAC has identified the importance of uplift across the sector in relation to the quality of AML/CTF programs and ML/TF risk assessments and shared its concerns regarding the depth and insight of independent reviews being conducted by some advisors in the sector.

Woman in meeting room smiling at advisor.

Gaming operators can reduce the risk of negative compliance assessments and exposure to adverse regulatory findings, reputational harm, fines and other enforcement outcomes, by ensuring that their AML/CTF compliance framework and independent reviews are informed by sector expertise and are tailored and responsive to the risks faced by the venue. A simple template only based approach is unlikely to satisfy a venue’s obligations under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act). Reporting entities remain legally liable for meeting their AML/CTF compliance obligations, and if shortfalls or non-compliance are found, any enforcement action, including penalties, will ultimately involve the venue concerned.

To help assess whether your current AML/CTF framework is fit for purpose, we've outlined key focus areas and essential questions to ask your advisors and independent reviewers.

Key AML/CTF Considerations for Pubs and Clubs

1. AML/CTF Programs and Risk Assessments Not Tailored to the Venue

AML/CTF Programs must include a ML/TF risk assessment tailored specifically to the venue. AUSTRAC has raised concerns about advisors relying on generic, ‘tick-the-box’ programs and risk assessments instead of creating assessments that accurately reflect the unique ML/TF risks a venue may face and the systems and controls that are in place to manage those risks.

During its visits to pubs and clubs, AUSTRAC has found many venues did not understand or agree with the risks outlined in the template-based ML/TF risk assessments provided by consultants. Some assessments even referred to controls that were either not in use at the venue or were ineffective in practice.

Questions to ask your advisor:

· Is my AML/CTF program and ML/TF risk assessment tailored specifically to my business?

· Does your process include a site visit or other in-depth inquiry when developing my program and risk assessment?

· Do you use a template, or is the solution fully customised to my venue’s risks and operations?

2. Lack of Transparency in Risk Assessment Methodology

Your AML/CTF program should incorporate an ML/TF risk assessment methodology guided by relevant qualitative and quantitative data to clearly justify how risk levels are determined. During assessments, AUSTRAC identified cases where all risks were labelled as low without any supporting evidence. Key data to inform these assessments might include the venue’s number of electronic gaming machines (EGMs), customer demographics, turnover figures, and loyalty card usage.

Questions to ask your advisor:

· Can you explain the methodology used for your risk assessment?

· Do the identified risks accurately reflect those my business faces?

· Is both quantitative and qualitative data used to determine a tailored risk rating?

3. Overlooking Money Laundering Methodology in Risk Assessments

AUSTRAC has found that many ML/TF risk assessments fail to consider known money laundering techniques. For example, some assessments overlooked risks such as buying and selling tickets or identifying gambling behaviours that are inconsistent with a customer’s profile. These activities may signal gambling with the proceeds of crime.

Questions to ask your advisor:

· Does the ML/TF risk assessment methodology consider known money laundering techniques?

· Does the ML/TF risk assessment include a broad range of money laundering red flag indicators?

· Are you up to date on real-world ML/TF risks and their potential impact on venues?

4. Misalignment with Business Policies and Practices

AML/CTF programs must match the venue’s real-world policies, procedures and/or guidelines. AUSTRAC found instances where AML/CTF programs referenced procedures that were not followed in practice, creating a disconnect between the documented controls and the venue's operations.

Questions to ask your advisor:

· Does the AML/CTF program align with the venue's actual day-to-day policies, procedures, and guidelines? Does your review assess how effectively they have been implemented?

· How do you assess whether the AML/CTF program has been properly implemented?

· What specific steps do you take to evaluate the effectiveness of the AML/CTF program implementation and operation in practice?

5. The Importance of Detail in AML/CTF Programs

AML/CTF programs must include sufficient detail to help staff implement effective systems and controls. During its assessments, AUSTRAC found instances of Enhanced Customer Due Diligence (ECDD) programs that were only a paragraph or two in length, failing to meet the requirements of the AML/CTF Act and Rules.

AML/CTF programs must avoid the use of overly general or ambiguous language, such as ‘may undertake’" or ‘could be applied’, especially in relation to ECDD which can make it difficult for venues to operationalise their program or demonstrate compliance with their AML/CTF obligations.

When selecting an advisor, it's important to balance cost considerations with the quality and suitability of services being provided. Tick-the-box solutions or automated, generic programs are increasingly falling short of AUSTRAC's expectations, lacking the detail required to be effective and leaving venues at risk of non-compliance.

Questions to ask your advisor:

· How detailed is the AML/CTF program and risk assessment you provide?

· What outcomes or recommendations can I expect at the conclusion of your independent review?

6. AML/CTF Risk Awareness Training

AML/CTF risk awareness training must align with an accurate and tailored ML/TF risk assessment that considers the specific risks the venue may reasonably face.

AUSTRAC identified cases where AML/CTF risk awareness training outlined risks that were inconsistent with those in the venue’s own ML/TF risk assessment and AML/CTF program.

Venues should not rely solely on generic training programs, such as those provided by the TAB for venues that offer retail wagering. Instead, venues must ensure their training enables employees to understand the unique ML/TF risks associated with their business operations and their specific AML/CTF program.

Questions to ask your advisor:

· Is our AML/CTF training tailored to address the specific to the risks our venue faces and the requirements of our AML/CTF Program?

· Does our training cover known money laundering methodologies and how they could impact our venue?

· What support do you provide to ensure our business effectively implements its AML/CTF obligations?

· Does our training cover the topics set out in our AML/CTF program?

Penalties for non-compliance

Breaches of the AML/CTF Act may result in criminal or civil penalties, or other disciplinary action. Breaches of the civil penalty provisions in the AML/CTF Act can attract a pecuniary penalty of up to $33 million for a body corporate and $6.6 million for individuals.

Recent fines by AUSTRAC involving gambling industry participants include Tabcorp ($45m), Commonwealth Bank ($700m), Westpac ($1.3bn), Crown Melbourne and Crown Perth ($450m), SkyCity Adelaide ($67m).

Choosing the Right AML/CTF Advisor: A Checklist for Success

Selecting the right advisors to develop your AML/CTF compliance framework and to undertake independent reviews at regular intervals is important to effectively respond to financial crime risks to your venue and the community. It also helps to guard against expensive and damaging reputational and financial risks if your AML framework is deemed not to be compliant.

It is important to work with advisors who:

Understand the legislative requirements.
Tailor the program and risk assessment to the specific risks your business reasonably faces.
Ensure the program is practical to implement, easy to follow, and effective in helping you to meet your legal and regulatory obligations.
Conduct truly independent AML/CTF reviews which are sufficiently detailed and constructive to help your business respond to the ML/TF risks that it faces.

Book a free 20-minute AML/CTF consultation with one of our experts to find out more about Senet’s comprehensive services for gaming venues.

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Senet specialises in simplifying AML/CTF compliance, working with clients to demystify the process and implement effective business solutions.

Our approach involves assessing each business’s unique circumstances, developing a tailored AML/CTF program and risk assessment that seamlessly integrates into current workflows.

Find out more about our AML/CTF program and risk assessment services.

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