Another Australian Casino Operator is in Trouble as Industry Scrutiny Intensifies

Posted on: October 26, 2022, 07:22h. 

Last updated on: October 26, 2022, 02:46h.

Erik Gibbs Read More

Expertise: Asia Pacific Gaming, Gaming Business, Global Gaming.

First it was Crown Resorts, then it was Star Entertainment. Now, another casino operator, albeit much smaller, is in trouble for violating gaming rules in Australia.

ABC News reported that the Reef Hotel Casino in Cairns violated Queensland’s Casino Control Act. The company that holds its casino license, Reef Corporate Services Ltd., acknowledged its breaches in court. Although the issue wasn’t as egregious as the money laundering charges Crown and Star faced across the country, it may still cause the company some pain.

This is the latest blot on Australia’s gaming industry, which has faced a number of scandals over the past few years. New revelations that just surfaced aren’t going to help the situation, either.

Undertow at the Reef

The Reef, which is also facing an investigation for allegedly working with junkets, had a deal in place with Reef Corporate Services to use its license. In return, that entity was receiving money from the casino.

That violates Queensland’s gaming regulations, according to the Office of Liquor and Gaming Regulation. It cited the company, pointing out that any such agreement must first receive approval from the Minister for Liquor and Gaming.

The two entities recognized the failure and are ready to receive whatever punishment may come. However, they don’t have to worry too much, as the maximum fine for the violation is just AU$5,750 (US$3,721).

The Reef has to be more concerned with the other investigation. The casino, which is partly owned by Casinos Austria, reportedly had an arrangement with at least one junket that the government hadn’t approved. The casino has denied the allegations.

Slot Machines are Banks for Money Launderers

Every time an incident involving a casino or gaming venue surfaces, it only serves as fertilizer to allow opposition to grow. Crown and Star didn’t do themselves or the industry any favors with their irresponsible and potentially criminal operations, and things are going from bad to worse.

The New South Wales (NSW) Crime Commission issued a report Wednesday that essentially calls Australia’s slot machine segment a network of banks for money launderers. NSW Crime Commissioner Michael Barnes said there’s no way of knowing how extensive the network is, though he thinks it could involve “billions of dollars.”

It is a deeply concerning peculiarity that in the largely cashless digital economy in which we live that gambling in NSW pubs and clubs remains a $95 billion a year information black hole,” Barnes said.

NSW has already begun to introduce cashless gaming, and the report’s findings will almost certainly expedite the transition. Non-cash gambling, according to its supporters, allows for better government oversight and consumer protection, as well as the elimination of potential money laundering.

NSW Faces New Scandal

The state has been at the forefront of anti-money laundering (AML) discussions for the past several years. It’s not alone, either. Western Australia now faces allegations that the entire state is out of compliance with Australia’s AML rules.

NSWLG previously had a special team that specifically worked to uncover money laundering and organized crime in the gaming industry. By last October, at the height of the debacle involving Crown and Star, there were around 10 members of the growing team.

As quickly as it grew, it stopped, the report says. Two months after Kevin Anderson took over as the NSW Minister for Hospitality and Racing, amid a government restructuring, everything changed. The media outlet cited sources that indicate that the regulator disbanded the AML group. This is because the government decided that investigating potential money laundering was outside the scope of a regulatory agency.

The group only gathered information. It then forwarded it to the NSW Crime Commission, which then took action, as necessary.

Curiously, Anderson was the replacement for Victor Dominello, who left under pressure as he was campaigning for the use of cashless gaming. NSW clubs threatened to push for the removal of the sitting government in next year’s elections if Dominello remained. The threats worked.