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 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.
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 and terrorism.
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.
The Board will need to start complying with the Act from 1 August 2019.
To get ready, the Board will need to take a number of steps beforehand. For more information, see What does the Board have to do to comply with the AML/CFT Act?
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. Alternatively, they may use an account to receive cash from associates, to move cash nationally, or 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 laundering money through racing and sports betting and help detect them if they do.
Importantly, it will also strengthen the overall AML/CFT system. Casinos have been covered by the Act since 2013. Also, the Board may detect ‘red flags’ that might not be picked up by a bank or other financial service providers who interact with the same customers. That’s because the Board may have more information about the people or funds involved in a particular transaction.
Initially, you’ll have to:
On an ongoing basis, you’ll have to:
For information about ways to reduce compliance costs, see:
The Department of Internal Affairs (DIA) will supervise the Board, as well as other businesses that Phase 2 of the Act applies to. DIA will help the Board comply with the law and enforce it when needed. Some of the things DIA will do include:
A range of existing guidance material is already available to help get you started Now the Bill has been passed, we plan to engage with sectors to develop regulations, which will provide more clarity, and produce more guidance material. For more information, see:
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