Just for the record, I’m not opposed to gambling. Like most of us I have the occasional flutter. What I am opposed to is the harm caused by gambling and the deliberate strategies employed by the gambling sector to hoover as much cash as possible into their machines with no thought of where the millions come from.
Pokie machines are designed to hook people into addiction. According to Health Sponsorship Council research, two out five regular pokie users will develop a problem, and other research estimates that around 40% of what is spent on these machines comes from problem gambling and/or crime.
For the gambling industry, 40% is pretty good odds. So despite giving a cursory nod to regulations around harm minimisation and the detection of money laundering, the sector is not really that interested in finding a way to reduce their substantial profits. That’s why it’s not surprising that in Auckland, the SkyCity Casino is once again implicated in another potential money laundering scheme.
With the recent passing of the legislation that included large gambling concessions for SkyCity in exchange for them building the convention centre in Auckland, I’m predicting the likelihood of more money laundering activity there due to the introduction of cashless gambling with the ‘Ticket In Ticket Out’ system.
This is a direct quote from the Treasury’s Regulatory Impact Statement issued in July:
However, there are aspects of the regulatory concessions that potentially raise the risk of money laundering through SkyCity.
For example, the anonymity that can be associated with TITO technology has the potential to facilitate money laundering, by increasing the potential for currency refining and ticket structuring.30 In effect, this means that low denomination notes could be fed into one or more gaming machines or kiosks and then be redeemed by ticket into high denomination notes or casino cheques. Increasing the use of TITO technology (and raising the denominations that can be fed into a machine) may therefore increase the potential for money laundering.
Gambling can be made safer – we’ve listed how in a recent discussion paper – but it requires an industry that will actively discourage problem gambling and crime and not rely on these grubbier aspects of gambling to fuel their profits.