Gambling is big business in Australia. Despite numbering only around 25 million souls, Australians wager some $30 billion per year. You don’t need a degree in mathematics to work out that is more than $1,000 per person per year on average. In these difficult economic times, a leisure industry that is turning over so much cash would ordinarily be cause for celebration. But this is no ordinary industry.
Australia’s famously laid back attitude to gambling has been forced to undergo a change, as lawmakers and regulators have uncovered a litany of non-compliances at Australia’s biggest casinos.
Star Entertainment “unfit to hold a license”
Last September, the New South Wales regulator completed a 36-day investigation into the management of Star’s flagship casino in Pyrmont, Sydney. The report concluded that Star Entertainment Group was “unsuitable” to operate the casino, and its license was withdrawn.
The casino was within an ace of having its doors closed and bolted, but ultimately, the NSW Casino Commission decided to suspend the license and to allow the casino to continue to operate under a temporary manager, who was charged with the responsibility of undertaking a “robust root cause analysis and review of the casino’s culture.”
Money laundering and fraud allegations
The balloon might have only gone up a few months ago, but the warning signs had been plain to see for a year or more. A public inquiry earlier in 2022 revealed that Star allegedly disguised almost $1 billion as hotel expenses. The money was instead withdrawn by patrons and gambled at the Sydney casino. Star’s own Due Diligence manager Angus Buchanan testified that “it would certainly appear” that money laundering had taken place.
Similar allegations against rival Crown Casino Group led to independent investigators finding the company “unfit to run casinos” in Sydney, Melbourne and Perth. Each report allowed Crown to continue operations subject to it addressing a significant list of corrective actions.
Online alternatives also under fire
The problems come as a growing percentage of Australian casino gamblers look to take their business to cyberspace instead. Dozens of providers are offering online casinos in Australia for real money despite regulators casting their icy gaze in that direction, too. Over the past month, the gambling regulator has issued blocking orders to the nation’s internet service providers relating to seven more casinos.
This brings the total number of “blocked” offshore casinos to around 700. However, the number of Australians placing wagers at online casinos continues to rise every year, so there are inevitable questions over whether blocking orders serve any tangible purpose.
New concerns bring SkyCity to the table
In December, Adelaide’s SkyCity casino came under the microscope. SkyCity is a New Zealand-based operator with casinos in its home nation and in Australia. The investigation was not prompted by any specific allegations against SkyCity. It was simply a gut reaction from the regulator, who decided that in view of the issues found with Crown and Star, the third large operator in Australia should also be subject to a close review.
The investigation uncovered numerous breaches of anti-money laundering and counter-terrorism financing (AML/CTF) laws. It also found that controls to maintain a compliant AML/CTF program were almost completely absent. SkyCity is still awaiting confirmation from the regulator as to the sanctions it will face. Precedents suggest that a long list of corrective actions, follow up audits and a fine in the region of $50 million are likely, however.
Changing times and changing attitudes
Gambling is part of Australian culture. However, the actions uncovered by some of the nation’s largest companies in the gambling industry have shown a culture of a different sort. Regulators describe it as one of greed, fraud, negligence and misconduct.
This comes at the same time as regulators wage their ongoing battles against online providers. Added to the mix, there are increasingly loud voices in government demanding that pokies be either removed from certain public places or limited in some other way.
In summary, it is clear that right now, Australia’s gambling industry is at a crisis point. In the months ahead, we will find out what the future holds for the major gambling businesses, and consequently the impact it will have on Australians’ freedom to partake in their favorite pastime.