Physical gambling, such as pokie machines and on-course bookmakers are attractive to criminals wanting to launder the proceeds of crime.
Bookmakers and betting agencies may also have become more attractive to criminals over the past few years as the financial sector has implemented comprehensive AML/CFT measures.
Bookmakers and betting agencies are vulnerable to money laundering activities for various reason, such as ease of access, anonymity, high volume of cash transaction.
The Money Laundering and Terrorist Financing (ML/TF) risks associated with bookmakers and betting agencies include:
- Winnings or unused funds paid back to an account other than the one through which the original bet was made;
- Significant volumes of cash transactions, and the need for quick processing of payments;
- Depositing illicit cash into a betting account. Funds are later withdrawn as ‘winnings’ linking the money to a legitimate source; and
- The avoidance of direct involvement in the money laundering process, through the use of people unrelated to the initial criminal activity. These are known as ‘front people, mules and clean skins’ through whom betting transactions are channelled.
Bookmakers and betting agencies must ensure the organisation conducts a comprehensive ML/TF risk assessment to identify, assess, mitigate and manage ML/TF risk exposures as a critical first step in complying with AML/CFT laws.