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Is money laundering occurring in your hotel?

As featured in QHA Review magazine

Money laundering is more common through gaming machines than many licensees realise and many hotels underestimate the risk of money laundering in their venue. The Australian Transaction Reports and Analysis Centre (AUSTRAC) have identified hotels as vulnerable targets for money laundering practices through their recent campaigns. All hotels with gaming machines should be aware of their Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) reporting obligations and the requirement for them to have a compliant AML/CTF plan.

Accordingly, AUSTRAC has developed the following tips for hotels in protecting themselves against money laundering:

  1. Hotels need to ensure that they are not taking a 'one-size fits all' approach to identifying and managing money laundering risks. Rather, each hotel should have a specific AML/CTF program in place which is tailored specifically to the hotel. This should address the way that a hotel will respond to money laundering and the associated risks surrounding AML/CTF.
  2. It is important for hotels to realise that money laundering can still occur when a patron plays all of the money they deposit. Criminals are increasingly willing to lose a percentage of their deposit as a cost of money laundering. Venues cannot rely on the fact that a patron is playing the gaming machines as evidence that money laundering is not occurring in their venue. Accordingly, it is critical that hotels have a transaction monitoring program that can address this type of money laundering. Through analysing the data collected by this program, hotels should be reporting customers who receive a high number of gaming payouts over a specific period.
  3. Hotels should note that money launderers are often regular customers. While it is important to build strong relationships with customers, Licensees should be constantly monitoring their hotel for suspicious activity. AUSTRAC has advised that this can include customers who are buying winning tickets/cheques, asking for cheques to be written in someone else's name and regularly bringing very large amounts of cash to gamble.
  4. Hotels have specific record keeping obligations under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006. It is critical for hotels to maintain accurate records of transactions. AUSTRAC recommends that these records are kept electronically, making monitoring transactions under your monitoring program easier.

It is important for hotels to be reporting any suspicious matters to AUSTRAC and taking their AML/CTF responsibilities seriously. Your hotel will not get into trouble for reporting for AUSTRAC and where there is no criminal activity, the customer will not be adversely affected. However, a hotel can be fined if they do not comply with the requirements under the Anti-Money Laundering and Counter-Terrorism Financing Act including, having a compliant AML/CTF program in place and reporting suspicious matters in their venues.

We can assist you in tailoring a compliant program for you. Please give me a call on 3224 0230 if you would like any assistance.

"The content of this publication is for reference purposes only. It is current at the date of publication. This content does not constitute legal advice and should not be relied upon as such. Legal advice about your specific circumstances should always be obtained before taking any action based on this publication."