Is your club's Anti-Money Laundering/Counter-Terrorism Financing program nimble enough?

Today, more than ever, the clubs industry is facing greater scrutiny from the regulator and the public regarding the clubs’ compliance with their Anti-Money Laundering /Counter-Terrorism Financing (‘AML/CTF’) obligations.

Recent media reports have noted a whistleblower and former Clubs NSW employee who alleged widespread money laundering through poker machines in pubs and clubs across the country. Regardless of whether the allegations are true, the message is strong and clear– clubs need to reassess whether their AML/CTF framework remains nimble and their compliance program adequate.

Electronic Gaming Machines (‘EGM’) venues are inherently vulnerable to risks of money laundering and financial crime.  Clubs with more than 15 EGMs are reporting entities and must have in place a compliance program to manage the risk of their EGMs being used for money laundering and terrorism financing activities.

At the minimum, clubs should ensure that their compliance program incorporates the following:

  • An AML/CTF Program that is tailored to your business and is subject to regular risk assessment and review;
  • A transaction monitoring program that effectively captures suspicious and irregular gaming activities and payouts and supports efficient reporting to AUSTRAC;
  • A robust Know-Your-Customer (KYC) procedures including an awareness of the patrons’ source of funds and assessment if it is appropriate to continue providing gambling services to them;
  • A sound AML/CTF risk awareness program that empowers staff on their day to day duties;
  • Clear mechanisms to monitor venue for suspicious activities; and
  • Accurate electronic records of transactions.

Failure to maintain an effective AML/CTF compliance framework can result in substantial financial loss, monetary fines and reputational damage to clubs.

AUSTRAC has previously warned clubs that if gaps in their AML/CTF program are not addressed, enforcement powers will be considered.

Prosperity Audit Services helps clubs assess vulnerabilities and threats in their AML/CTF control environment and develop fit for purpose and industry better practice solutions to strengthen their AML/CTF Program.

We partner with our clients to identify, assess, manage and mitigate their AML/CTF risk exposures and help them enhance the maturity of their compliance processes, tools and systems.

Our services include:

  • Independent review of AML/CTF Program. We conduct a comprehensive review of the club’s AML/CTF Program to assess compliance with regulatory requirements and effectiveness of the framework. Our independent review also endeavours to benchmark the club’s AML/CTF program against best practices in the industry and identify opportunities that will strengthen the efficiency and effectiveness of the club’s AML/CTF Program.
  • Health Check assessment. We assess the design and operational effectiveness of the club’s AML/CTF program to provide clubs certain level of assurance during the regular review of their AML/CTF Framework.
  • Design and delivery of AML/CTF risk awareness program. We develop and deliver a structured and tailored AML/CTF staff training program designed to provide an understanding of how to identify, assess, prevent, mitigate and report money laundering and terrorism financing.
  • Investigations. We conduct investigations to probe suspicions of money laundering and terrorism financing activities in clubs.

For more information about Prosperity’s AML/CTF services and capability, please contact Luke Malone.