Betting services are at risk of being exploited by criminals to launder money. The New Zealand Racing Board is among organisations that will be affected by proposed changes to the Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) Act.
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The New Zealand Racing Board administers all racing and sports betting in New Zealand. It will need to put AML/CFT measures in place once ‘Phase 2’ of the Act comes into effect.
This will help prevent money laundering, make it easier for authorities to find out where ‘dirty’ money came from, prosecute criminals, seize illegally earned money and assets, and stop crime.
Here’s a summary of the proposed changes.
The Board will need to put AML/CFT measures in place when it:
AML/CFT measures will not apply to class 4 gaming services provided by the Board (that is, gaming machines in its retail outlets). Customers who use these don’t set up accounts and there’s a low risk criminals will use gaming machines to launder money.
Criminals use betting services to launder illegally earned money, so it looks like they made it legally from gambling.
For example, they may store money in betting accounts for a short period before taking it out. They may pool together funds from multiple sources, which makes it harder to trace where it came from. Even if they lose some money gambling, they still win enough back to make it worth their while, because their ‘dirty’ money is now ‘clean.’
Introducing AML/CFT measures will deter criminals from using betting services and help detect them if they do.
Importantly, it will also strengthen the overall AML/CFT system. Gambling services provided by casinos have been covered by the Act since 2013. Also, the Board may detect ‘red flags’ that banks and other financial service providers who interact with the same customers might not pick up, because the Board may have more information about the people and funds involved.
Initially, you’ll have to:
On an ongoing basis, you’ll have to:
For information about ways to reduce compliance costs, see:
It’s proposed that the Department of Internal Affairs (DIA) will supervise the Board, as well as other businesses that Phase 2 of the Act will apply to. It will help you comply with the law and enforce it when needed. Some of the things DIA will do include:
For more information, see:
The Government intends to pass the law around the middle of 2017.
After that, businesses will have a period of time to prepare for the changes. It’s proposed the Board will have to comply 24 months after the Bill is passed.
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