AUSTRAC pokies case offers critical AML/CTF lessons for accountants
AUSTRAC has launched civil proceedings against pub and club operator Mounties following alleged “serious and systemic” non-compliance with anti-money laundering laws.
Mounties, one of the largest and most profitable club groups in NSW, has come under fire from AUSTRAC after it allegedly failed to uphold its anti-money laundering obligations.
It owns 10 venues, eight of which operate approximately 1,400 poker machines that rake in hundreds of millions of dollars in revenue.
“A business operating at this scale, in a cash intensive sector, is exposed to a high degree of money laundering risk,” Brendan Thomas, chief executive of AUSTRAC, said.
“In 2022 for example, the NSW Crime Commission released its Project Islington report which determined that billions of the approximately $95b gambled in NSW poker machines in 2021-22 was likely to be dirty money.”
AUSTRAC alleged that Mounties’ anti-money laundering and counter-terrorism financing (AML/CTF) program failed to conduct adequate risk assessments, staff awareness training, transaction monitoring programs and customer due diligence, leaving it open to criminal exploitation.
While clubs and poker machines may feel like a far cry from the accounting world, AML/CTF lawyer Fiona Halsey said that the Mounties case exemplifies the obligations that certain accounting firms will face under new AML/CTF laws.
From 1 July 2026, accountants that provide designated services relating to certain property and business transactions will have new AML/CTF obligations as ‘Tranche 2’ reporting entities.
“AML/CTF obligations are not merely a box-ticking exercise. AUSTRAC’s action against Mounties demonstrates that regulators expect entities to take an active, ongoing role in designing, implementing, and monitoring their AML/CTF programs,” Halsey said.
“Mounties’ alleged failure to monitor high-risk customers and verify sources of funds is a cautionary tale. Tranche 2 entities, many of whom deal with significant financial transactions, must be prepared to implement systems that can identify and mitigate money laundering risks.”
Mounties relied on a third-party provider to manage aspects of its AML/CTF program, like many other AML/CTF reporting entities. However, AUSTRAC said that outsourcing did not absolve the firm from its responsibilities to manage and mitigate money laundering risks.
“Relying on third party providers doesn’t absolve a business of its obligations under the AML/CTF Act. If a reporting entity outsources key parts of its program to a service that is not fit for purpose – especially without proper oversight or resourcing – they run a real risk of non-compliance,” Thomas said.
“All reporting entities, regardless of size, must stay actively involved in how their AML/CTF program is designed, implemented and monitored and I would say the same thing to other pubs and clubs who think bringing in a provider is a set and forget solution.”
Halsey echoed this sentiment, warning accounting firms that while they could outsource certain aspects of their AML/CTF program, the final responsibility to manage risks would still be theirs.
“The thing that can't be outsourced is the responsibility,” she said.
“The ultimate liability sits with the governing body of the firm. So in a partnership that would be the partners, in a company that would be the directors.”
AUSTRAC is yet to release guidance for tranche 2 entities’ new AML/CTF obligations, but Halsey said the Mounties case provided a useful preview of how AUSTRAC would pursue AML/CTF contraventions.
“As the government moves closer to implementing Tranche 2 reforms, the Mounties case provides a roadmap for what AUSTRAC will expect from new reporting entities.”
“The message is clear: proactive, risk-based compliance is not optional, and failure to meet these standards can result in significant legal and reputational consequences.”
