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2010-2011-2012
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
THE SENATE
ANTI-MONEY LAUNDERING AMENDMENT (GAMING MACHINE VENUES) BILL 2012
EXPLANATORY MEMORANDUM
(Circulated by authority of Senator N Xenophon)
ANTI-MONEY LAUNDERING AMENDMENT (GAMING MACHINE VENUES)
BILL 2012
EXPLANATORY MEMORANDUM
1. Background
The purpose of this Bill is to restrict opportunities for money laundering through poker
machines. Recent reports have highlighted this as a serious issue, with a media story
alleging that one individual was responsible for laundering up to $40,000 a week.
Generally, money laundering through poker machines consists of two options, either used
separately or in combination. Criminals can load up thousands of dollars into a machine,
play a few games games (usually losing a few dollars) and then cash out their credits.
Alternatively, launderers can buy cheques or dockets for winnings from other players, and
then cash those cheques or dockets themselves. The other side of this practice is that it
circumvents the protections put in place in relation to problem gambling; namely, the
requirement that winnings over a certain amount be paid in cheque, which help to prevent
problem gamblers from `chasing their losses' and provides a cooling-off period while the
cheque is cashed.
AUSTRAC has identified these processes as a means of money laundering. The bill aims
to address these practices through requiring that payouts over $1,000 are made by cheque
and are `threshold transactions' under the Anti-Money Laundering and Counter-
Terrorism Financing Act 2006. The bill also requires that any cheques for winnings that
are transferred into another name are also threshold transactions.
2. Short title
This clause is a formal provision and specifies the short title of Bill, once enacted, may be
cited as the Anti-Money Laundering Amendment (Gaming Machine Venues) Act 2012.
3. Commencement
This clause provides for the commencement of the Act on the day after the Act receives
Royal Assent.
4. Schedules
This clause states that each Act specified within a Schedule under this Bill would be
amended or repealed as set out by the provisions of this Bill according to its terms.
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5. Schedule 1
This schedule amends the Anti-Money Laundering and Counter-Terrorism Financing Act
2006 (the Act) to include poker machine payouts of more than $1,000 and the cashing of
transferred cheques as `threshold transactions'. Such transactions require a report made to
AUSTRAC in the approved form under the Act, allowing AUSTRAC to monitor and
record such activity for the purposes of reducing money laundering and other prohibited
actions.
Item One inserts a definition of `gaming machine credit' to ensure that both winnings
and unplayed credits are included in the $1,000 limit for cheque payouts.
Item Two inserts new paragraphs (ba) and (bb) into the definition of `threshold
transaction' in section 5 of the Act. Paragraph (ba) provides that a payout of winnings
over $1,000 at a gaming machine venue is a threshold transaction. Paragraph (bb)
provides that, where a cheque for gaming machine payouts is presented for cashing and
has been transferred from one person to another, this is a threshold transaction.
Item Three inserts table item 10A into the table at subsection 6(4) of the Act, which will
mean that the controller of an eligible gaming machine venue will be considered to be
providing a `designated service' for the purpose of the Act under certain circumstances
when paying an amount for gaming machine credits. As providers of designated services,
controllers of gaming machine venues will be required to abide by the laws surrounding
threshold transactions.
Item Four inserts a new section 143A, which requires gaming venues to pay out
winnings or gaming machine credits totalling over $1,000 by cheque, which indicates that
it has been issued for that purpose. Failure to do so results in a penalty of two years'
imprisonment or 120 penalty units.
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Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Anti-Money Laundering Amendment (Gaming Machine Venues) Bill 2012
This Bill is compatible with the human rights and freedoms recognised or declared in the
international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny)
Act 2011.
Overview of the Bill/Legislative Instrument
This Bill amends the Anti-Money Laundering and Counter-Terrorism Financing Act 2006
(the Act) to list the payout of gaming machine credits or winnings and the transfer between
parties of a cheque from such a payout as threshold transactions, which are reportable to
AUSTRAC. It also provides that the payout of gaming machine credits or winnings over
$1,000 must be made by a cheque, which also identifies itself as coming from such a payout.
Human rights implications
This Bill engages the right to privacy, which is contained in article 17 of the International
Covenant on Civil and Political Rights (ICCPR). The right to privacy is generally understood
to prevent unlawful or arbitrary interferences with an individual's privacy, family, home and
correspondence.
The recording and reporting of the personal information of people involved in a threshold
transaction under the Act is considered a permissible limitation on this right as it is done with
the intent of preventing crime and protecting national security.
The reporting of threshold transactions to AUSTRAC are already covered by the
organisation's strict privacy requirements and the provisions in this Bill would not alter that
framework. In addition, the limit of $1,000 would exclude most poker machine players due to
the low value of most genuine wins, therefore limiting the right to privacy in the least amount
possible while still achieving the desired outcome.
Finally, the threat of money laundering and associated crime within gambling venues has
already been addressed to some extent by AUSTRAC, with some venues (bookmakers and
casinos) already covered under the regulations. The additional measures in the Bill will close
the loophole that currently exists with poker machines, while the lower limit ($1,000 in the
Bill compared to $10,000 existing limit for other forms of gambling) addresses the problem
of the `remote' nature of poker machines, where staff are not involved in play.
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The dual aims of this Bill (to reduce money laundering and to prevent money launderers
taking advantage of problem gamblers through purchasing or transferring winning tickets)
outweigh any limitation on the right to privacy, particularly since any personal details will be
governed by the privacy laws applying to AUSTRAC and threshold transactions.
Conclusion
The Bill is compatible with human rights as it limits the right to privacy to the least amount
possible and is in line with existing laws and regulations.
Senator Nick Xenophon, Independent Senator for South Australia
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