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Yasmin Moore November 30, 2022 4 min read
Gambling Companies in Australia Benefit from Proceeds from Crime
In the past several years, there are many cases where gambling companies keep the proceeds of crimes committed by people who develop a gambling addiction, argues Stephanie Convery in a piece she wrote for The Guardian. People who are victims of these crimes state that the system, which is supposed to regulate these situations, is failing.
In September 2022, Gavin Fineff, a former financial adviser from Sydney pleaded guilty to multiple fraud charges before the New South Wales district court. Fineff lost over $8 million to sports wagering, and much of the money belonged to his clients and friends. The victims of these thefts never received their money back. Fineff will be sentenced in January.
Millions of innocent Australians have been hurt from the destruction of someone with gambling addiction … I accept my punishment but I can’t accept the destruction continuing.Gavin Fineff, a former financial adviser
In 2021, a Tasmanian woman at the age of 48 was sued for having stolen $940,221 from the veterinary practice where she worked. She also accumulated a debt totaling $24,218 on a credit card, which was illegally obtained. The woman had been diagnosed with a gambling disorder and spent most of the money playing Heart of Vegas, a social casino game, owned by Aristocrat Leisure, which is Australia’s leading poker machine manufacturer.
She played the said game via Facebook, which, in turn, kept a 30% cut of every transaction she made. The 48-year-old woman was sentenced to 26 counts of fraud and was issued with compensation orders to return the money to the companies she stole from even though she was already deeply in depth. Both companies Aristocrat and Facebook kept the money, argues Convery
In 2018, another Tasmanian at the age of 27, who worked as an assistant financial accountant, was sentenced on various charges of fraud after stealing $292,955 from his employer and other individuals. The man said before the court that he had stolen the money, driven by gambling addiction. He put the money into his Sportsbet account but lost everything. He was sentenced to imprisonment and was ordered to pay compensation even though he had already many debts.
Restitution Orders Are “Empty Promises”
Michael O’Connell, a former commissioner for victims’ rights in South Australia, called the restitution orders, which are made on people convicted due to frauds related to gambling, “empty promises”. He also added that even if an individual manages to satisfy these partially the pending debts and compensation, the sum does not match the money, which was really lost, and the harm that the victims experienced.
Lauren Levin, a director of policy and campaigns at Financial Counselling Australia, commented that the current legislative and regulatory system is also failing the people who suffer from gambling disorder. Nobody chooses to get an addiction and people who experience gambling problems never imagined that they will commit such crimes.
States and local territories have to regulate gambling companies. They also have to examine customers’ sources of wealth. The Australian Transaction Reports and Analysis Centre, AUSTRAC, is responsible for the investigation of entities that do not comply with the established laws.
Sportsbet is licensed in the Northern Territory, where the laws are not as tough as they are in other territories. However, in 2019, the respective government legislated the so-called codes of practice for online gambling companies. Per these laws, gambling companies are obliged to train their staff to recognize and act when noticing behaviors related to problem gambling, such as “gambling for an extended period”, “changing gambling patterns”, “increase in deposit frequency” and “escalating sums of money deposited”.
Sportsbet commented that it had acted properly in the case of the 27-year-old Tasmanian and would not return the received money from him.
The game “Heart of Vegas” is not regulated as gambling in Australia, because the player cannot cash out their winnings.
A spokesperson for Product Madness, the UK-based subsidiary of Aristocrat, which publishes Heart of Vegas, denied commenting on the woman’s case.
Due Diligence on High-Risk Customers
According to Peter Soros who is deputy chief executive of regulatory strategy at Austrac, gambling companies fail to perform additional due diligence on their high-risk customers.
On the other hand, Levin commented that when a young finance professional, who receives a salary, places bets worth thousands of dollars for a period of several months, this could be an alert for big gambling companies to suspect something.
Levin further stated that the situation could be different if there was a role for the commonwealth director of public prosecutions who would act on behalf of victims to get money back from gambling companies. She said that if gambling operators gain profit from crime-funded gambling, then the current legislation has to be changed.