Raids on illegal casinos in Australia have increased amid ongoing debates about the regulation of the gambling industry.
According to Australian media group News Ltd, last year authorities conducted raids at five illegal casinos in Sydney, signaling a rise in the black market. Additionally, the number of private poker games in the city has significantly increased.
In one case, police raided an unlicensed casino after a player reported being held hostage over unpaid debts. Upon arriving at the venue, officers discovered multiple gaming tables operating and hostesses serving food to customers.
Tobacco Wars
Media reports indicate that due to stricter regulation of the gambling market in Australia, more players are turning to unlicensed venues.
This situation comes amid serious financial troubles for one of the country’s largest casino operators, The Star Entertainment Group, and rumors of its potential sale to international investors.
The company attributes its deteriorating situation to rising regulatory costs and a decline in visitor numbers. Among the new rules already implemented or in the process of being implemented are mandatory use of gaming cards and a shift to cashless transactions.
Earlier this month, The Star confirmed that its shares were automatically suspended from trading on the Australian Securities Exchange due to the untimely publication of its financial report for the first half of FY2025.
Mark Morri, Crime Editor for The Daily Telegraph, who first reported on the situation, compared it to Australia’s so-called “tobacco wars.” In this sector, strict government regulations and high excise taxes led to the market being flooded with smuggled products supplied by organized crime groups.
Michael Phelan, former head of the Australian Criminal Intelligence Commission (ACIC), shares this view, warning that the market is approaching a dangerous tipping point due to excessive regulation.
Speaking at the Regulating the Game conference in Sydney last week, he stated: “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.”
Reflecting on his experience with the ACIC, Phelan emphasized the need for law enforcement agencies to have access to information about the gambling sector, which is made more difficult due to black market involvement.
The unregulated gambling industry is often seen as an easy target for criminal groups due to the lack of KYC and AML protocols, which are characteristic of the regulated market.
According to Phelan, AU$64 billion (US$40.2 billion) is laundered in Australia each year through various methods.
“I have zero visibility on any of that if it’s done in a warehouse that’s been hired for a week to run a casino or if the exchange of money is done in a McDonald’s carpark, which is what happens when you bet with an offshore site. All that leads to an environment that is not healthy,” he explained.
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