Authorities have raided five illegal casinos in Sydney over the past year, indicating a significant increase in underground activity at a time when regulatory crackdowns have hampered the operations of licensed operators Crown Resorts and Star Entertainment Group.
According to a report by Australian media group News Ltd, there has also been a major rise in the number of private poker games taking place citywide.
The increase has been attributed to a crackdown on money laundering and illegal transactions at Crown and Star, which has seen criminal actors looking for new avenues through which to pursue their activities. However, players are also flocking away from licensed casinos due to the many barriers now in place.
In comments to Sky News, Crime Editor for The Daily Telegraph, Mark Morri – who was involved in breaking the illegal casinos story – said, “There’s a lot of money out there and if people want to spend it and they can’t spend it the way they want to at casinos which are being scrutinized, organized crime will find a way to try and make a buck out of it and illegal casinos is one way.”
Morri likened the situation to Australia’s “tobacco wars” which, due to the massive taxes now in place on legal tobacco products, has seen organized crime syndicates moving large volumes of tobacco into the country and selling them through retail outlets at significantly discounted prices.
This, he said was creating “opportunities for crime figures to exploit” which in the gaming space meant legal casinos were “losing out”.
News Ltd cited one recent incident where police raided an illegal casino after a player contacted them and said he was being held hostage for outstanding debts. The casino was operating a number of gaming tables and had hostesses serving food to customers.
Australia’s casinos have come under the regulatory microscope in recent years for multiple compliance failures including their dealings with international junkets. Among the new measures in place, or in the process of being implemented, are mandatory carded play and cashless gaming. The measures don’t, however, apply to the thriving pubs and clubs industry – home to more than 90,000 electronic gaming machines in New South Wales alone.
Crown Resorts, acquired by US private equity giant Blackstone in 2022, has been selling off non-core assets in response to the profit squeeze while Star Entertainment Group remains on the brink of bankruptcy. The company is currently weighing up an offer from US casino operator Bally’s and has also revealed a deal to sell off its recently opened Brisbane resort.
As reported by Inside Asian Gaming, the former head of the Australian Criminal Intelligence Commission (ACIC) told attendees of the Regulating the Game conference in Sydney last week that excessive regulation and taxation of the country’s gambling industry was increasingly driving players to illegal operators.
“The issue is that if the market or taxation gets to a point beyond the equilibrium – if you get to a point where you tax the industry so much and you overregulate – then people will look to other markets to go to and we’ve seen that happen in [the Australian tobacco] industry where regulation falls off a cliff and you have zero visibility,” he said.
“When costs become too high, people will look for another market.”
