In Australia, pokies, formally known as electronic gaming machines (EGMs), are widely used in pubs, clubs, and casinos. Their high volume of cash transactions and limited traceability make them attractive for money laundering. Offenders use these machines to place illicit cash into the system and later cash out as apparent winnings, disguising illegal funds as legitimate income.
Public inquiries and sector guidance have repeatedly identified pokies as a major AML risk area, leading to stronger oversight and a growing call for cashless, traceable gaming solutions.
Pokies Definition
Pokies, short for poker machines, are electronic gaming machines (EGMs) widely used in Australian pubs, clubs, and casinos. They are one of the most common forms of gambling in Australia and a significant source of revenue for venues. However, their cash-intensive nature, ease of access, and limited player traceability make them a persistent anti-money laundering (AML) risk.
From an AML perspective, pokies are attractive to criminals seeking to legitimise illicit cash. Offenders insert large sums into EGMs, perform minimal gambling activity, and then cash out, creating the illusion of legitimate gambling winnings. This process effectively converts illegal funds into seemingly lawful income.
Investigations by the NSW Crime Commission and research by AUSTRAC and the Australian Institute of Criminology have highlighted how pokies are used in laundering schemes.
Regulators recommend tighter customer due diligence, transaction monitoring, and the adoption of cashless gaming systems to improve visibility and accountability.
Modern compliance solutions, such as customer screening with FacctView, transaction monitoring, FacctGuard and payment screening with FacctShield, help venues detect suspicious behaviour early. As venues move towards cashless and account-based pokies, these systems provide full traceability of deposits, gameplay, and withdrawals, reducing anonymity and strengthening AML oversight.
How Money Laundering Happens Through Pokies
Money laundering through pokies typically involves concealing illicit cash flow by exploiting gaps in monitoring and controls.
Common typologies include:
Cash placement with minimal play. Criminals insert large sums of cash, perform only a few spins, and cash out most of the amount to create a false record of gambling winnings.
Purchasing winning tickets. Offenders buy legitimate winning dockets from other players to convert dirty money into clean, traceable funds.
Structuring across venues. Multiple individuals spread smaller cash deposits across different venues to avoid AML reporting thresholds.
Collusion and weak oversight. Poor compliance procedures allow staff or patrons to repeatedly use EGMs for illicit cash movements.
These behaviours have been documented across multiple Australian states and cited in investigations by financial intelligence and regulatory bodies.
Red Flags Venues And Financial Institutions Should Monitor
Before implementing AML controls, it is critical to understand what constitutes suspicious activity.
Key red flags include:
Large or repeated cash insertions followed by minimal play and immediate cash-out.
Frequent small redemptions across different venues within a short period.
Multiple patrons working together to move cash or exchange payout tickets.
Customers who refuse identification or use multiple player cards.
Unusual patterns in redemption activity compared to venue averages.
Effective AML Controls For Pokies Operations
Venues and financial institutions can significantly reduce risk by applying layered AML controls.
These include:
Customer verification and patron profiling. Implement basic identification measures for high-value or frequent players.
Transaction monitoring and analytics. Use transaction monitoring systems to detect structuring, repeat redemption behaviour, and unusual play-to-cash ratios.
Payment screening at deposit and withdrawal. Integrate payment screening to flag links to sanctioned individuals or suspicious financial patterns.
Governance and reporting frameworks. Establish policies to escalate suspicious matter reports and review AML procedures regularly.
Cashless and account-based play. Adopt account-linked EGMs to improve traceability, auditability, and overall AML effectiveness.
Transparent Electronic Gaming Machines And AML
“Transparent” or account-based pokies systems provide greater visibility over player behaviour. Every deposit, game session, and withdrawal is linked to a verified account, allowing regulators and compliance teams to trace the full flow of funds. This approach supports better suspicious matter reporting and data integrity, while reducing opportunities for anonymous cash laundering.
The NSW Crime Commission inquiry provides clear evidence of the role EGMs play in money laundering. Similarly, AUSTRAC’s guidance on money laundering in Australia and the Australian Institute of Criminology’s special report series offer sector-specific insights and typologies for gaming-related AML risks.
