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Anti-Money Laundering Amendment (Gaming Machine Venues) Bill 2012 [2013]

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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This clause states that each Act specified within a Schedule under this Bill would be amended or repealed as set out by the provisions of this Bill according to its terms.

 

 

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.



 

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.

 

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