Gambling regulator withheld documents from money laundering inquiry

The state gambling regulator failed to provide crucial documents to the NSW Crime Commission - including profiles of people who may have used poker machines to launder money that was the proceeds of crime - during the commission’s investigation last year.

The documents were unearthed during a parliamentary call for papers by independent MP Alex Greenwich, acting on a tip that the crime commission inquiry codenamed Project Islington had underestimated the extent to which pokies were used to clean dirty cash in pubs and clubs.

Liquor and Gaming NSW searched their records in response to the standing order and identified 8497 relevant documents, which Crime Commission staff then reviewed before they were released to parliament to ensure there was no breach of its confidentiality. The commission narrowed the pile down to 125 documents that were of potential relevance to the inquiry and which they had not previously seen. But Liquor and Gaming tried to rule that 38 of these did not fit within the scope of the order. However, letters tabled in parliament on Tuesday afternoon indicate Crime Commissioner Michael Barnes personally intervened to ensure Liquor and Gaming released all 125 documents.

“With respect, I disagree,” Barnes wrote to the department’s legal director Andrew Saras, on Friday.

“The 38 documents identified relate to profiles of persons of interest which I understand were authored in early 2022 (during the period of the inquiry) and were marked for dissemination to the Crime Commission. I consider that given these two facts, they do indeed relate to the Crime Commission’s inquiry, even if they were brought into existence as part of another investigatory project.”

Crime commission staff have already used the documents, which will be released to parliament on Friday, to conduct further investigations into newly identified people of interest, review new information, re-examine relevant material and interview informants. However, the commission has not changed its position that criminals more commonly use poker machines to play with the proceeds of crime than to clean their dirty cash.

Data collected by clubs and pubs is incapable of identifying money laundering – partly because it cannot show the source of funds pumped into machines – and the commission’s re-examination of the documents reinforced the limitations of the data, Barnes wrote to Greenwich on Monday.

The commission remained of the view that the government and industry needed to improve the way they collected and analysed data. “The introduction of mandatory cashless gaming is another way to achieve the data enhancements required to identify money laundering,” Barnes said.