Good morning. I would like to begin by acknowledging that we are meeting on the lands of the Gadigal people. I pay my respects to their country, to Elders past and present, and to their enduring culture.

My name is Brendan Thomas, and I am the Chief Executive Officer of AUSTRAC—Australia’s anti‑money laundering and counter‑terrorism financing regulator and financial intelligence unit.

It is a privilege to speak with you today. You are the senior leaders responsible for protecting your organisations—and Australia’s financial system—from serious criminal harm. At this moment, your role has never been more important.

Gambling is deeply embedded in Australia’s social fabric and economy. It is also at the frontline of Anti money laundering regulation. The integrity of our financial system, the reputation of your businesses, and the safety of our communities depend on the strength of the decisions you make every day.

Australia’s AML regime exists to detect, deter, and disrupt money laundering, terrorism financing, and the crimes they enable. Over time, the framework has evolved in response to new technologies, new business models, and increasingly sophisticated criminal activity. That evolution continues—and it demands strong leadership from all of us.

The challenge of disrupting money laundering is not unique to Australia. Around the world, criminals continue to rely on lawful domestic financial channels to place, layer, and integrate illicit funds. Those channels remain effective because they are trusted, efficient, and embedded in legitimate economic activity.

Australia offers exactly those strengths. We have a stable political system, an open economy, an independent legal system, and a highly developed financial and gambling sector. These features make Australia a great place to do business. They also make Australia an attractive destination for criminals seeking to store and integrate the proceeds of crime.

Drug offences remain the single largest source of money laundered in Australia. But we also see significant laundering linked to tax and revenue crimes, government program fraud, illicit tobacco, and the global proceeds of scams. Financial crime today is not a series of isolated events. It operates as a connected, professional, and highly adaptive system.

Criminal networks now move money quickly across borders, across platforms, and across industries. They exploit digital payments, complex ownership structures, and trusted businesses. Australia’s deep connections across the Asia‑Pacific—through trade, migration, finance, and technology—make us both a target and a transit point for illicit finance.

Within that environment, gambling is routinely targeted. High transaction volumes, digital evolution, and cash‑intensive channels create opportunity. Criminals know this. The message is clear: our regulatory frameworks and controls must move as fast as the threats we face.

At its core, money laundering is a deliberate process. Criminals disguise the origin of illicit funds so they can use them as if they were legitimate. The process follows three familiar stages: placement, layering, and integration. Terrorism financing similarly involves moving and deploying funds to support violent or extremist activity.

The AML/CTF framework exists to stop this. It protects your organisations, your staff, and the broader community. It requires gambling operators to identify and assess risk, verify customers and beneficial owners, monitor transactions, escalate concerns, report suspicious activity, and apply enhanced due diligence where risk is high.

These obligations are not administrative hurdles. They are the foundation of trust. Strong AML/CTF controls protect your licence to operate and Australia’s reputation as a safe and well‑regulated place to do business.

Today, I want to speak plainly about the money laundering risks AUSTRAC has identified through our regulatory work with gambling and wagering operators. As I said here last year, there has been significant improvements in a number of areas in some businesses in the gambling sector. We need to recognise and encourage those. Despite that we have continued to have a range of involvement across the sector and it's important to communicate the kinds of problems we are seeing. What we have seen is not a collection of one‑off failures. We have seen recurring patterns—systemic weaknesses that criminals exploited repeatedly and often for long periods.

One persistent risk involves high‑value and high‑frequency cash transactions. Across multiple venues, customers moved extraordinary volumes of cash—sometimes millions of dollars—through deposits and withdrawals. In some cases, customers used prepaid cards, vouchers, and other opaque instruments to obscure the source of funds.

We saw cash brought into venues in unconventional and alarming ways. We saw bill stuffing—large cash deposits with minimal gameplay—used to convert illicit cash into seemingly legitimate winnings. These behaviours were visible, repeatable, and highly indicative of laundering risk.

Another recurring theme involved multiple accounts, third parties, and synthetic identities. Customers operated numerous accounts under different names. Third‑party deposits and withdrawals occurred frequently. This deliberate structuring made it difficult to identify who truly owned and controlled the funds—and that difficulty was the point.

We also saw high‑risk customers with known criminal histories or adverse media continue to transact. Some were linked to serious organised crime. Some were under active investigation. Some already had assets restrained or confiscated. Yet warnings from law enforcement and regulators did not always result in decisive action.

Source of wealth and source of funds checks were another critical weakness. In many cases, customers deposited large sums while refusing to provide credible explanations of where the money came from. High‑value patrons were rarely challenged. Enhanced due diligence was delayed or never completed—even when risk indicators were clear.

Cash‑like instruments and international payment methods further compounded these risks. Prepaid cards, vouchers, payout cards, and overseas accounts allowed funds to move quickly and with limited transparency. Without strong controls, these tools become powerful laundering mechanisms.

Transaction monitoring systems have often failed to keep pace. In some venues, monitoring relied on manual processes or staff observation rather than structured, risk‑based controls. Thresholds did not reflect actual risk. Staff lacked clear guidance. Alerts went unanswered. Risks accumulated.

We also saw conflicts of interest and staff misconduct. In some cases, staff accepting commissions or cash from customers. When incentives align with high‑risk behaviour, controls break down. This places staff, businesses, and communities at risk.

Reporting failures added to the problem. Suspicious Matter Reports and Threshold Transaction Reports were delayed, missed, or not repeated despite ongoing suspicious behaviour. Regulatory recommendations were not always implemented. Accounts remained open when they should have been closed.

When we examined entity‑level controls, similar themes emerged. Some operators did not conduct robust ML/TF risk assessments. Others failed to update their AML/CTF programs after regulatory findings. In cash‑intensive environments, weak implementation created real and persistent exposure to criminal exploitation.

The conclusion is unavoidable. These risks were significant. They were known. And they were realised in practice.

I also want to address a growing concern we are seeing across the gambling sector: the outsourcing of AML and financial crime functions without sufficient oversight or accountability. Many businesses now rely on third‑party providers for transaction monitoring, customer due diligence, and alert review. Outsourcing in itself is not a problem. It can be efficient, scalable, and entirely appropriate. But outsourcing does not outsource responsibility. The legal obligation to comply with the AML/CTF Act always rests with the regulated business. We are seeing cases where poor‑quality work by third‑party providers goes unchallenged, risks are missed, and alerts are closed without adequate scrutiny. When that happens, the failure sits squarely with the business. Effective governance means setting clear expectations, actively testing quality, and holding providers to account. Strong AML leadership requires ownership of outcomes—not just processes.

Strong AML/CTF controls are not optional. They are essential safeguards. When they operate effectively, they protect your organisation and disrupt criminal activity. When they exist only on paper, the consequences are real and serious.

As we approach the commencement of Australia’s reformed AML/CTF Act on 31 March 2026, AUSTRAC has been clear and measured in its expectations. We recognise the scale of change and the tight timeframe set by Parliament. Our regulatory posture during this transition is pragmatic and risk‑focused.

Preparation is expected. Perfection is not.

We do not expect perfection on day one. But we do expect sustained effort, strong leadership, and genuine progress in reducing money laundering risk. The core principles of identifying, mitigating, and managing risk remain unchanged.

We expect you to continue operating your existing controls, to develop and document clear implementation plans where gaps exist, and to manage ML/TF risk actively throughout the transition. If your controls are effective, maintain them. If they are not, fix them—now.

Implementation plans must be credible. They must identify gaps, explain why they exist, set realistic timelines, and assign accountability. They must be endorsed by senior management and the board. That endorsement matters. It signals ownership.

AUSTRAC will take a proportionate approach where businesses demonstrate genuine effort. But where risks remain unmanaged, regulatory action will follow.

This reform is not about paperwork. It is about outcomes. It is about stronger detection, better controls, and more resilient systems—particularly in cash‑intensive environments.

To support you, AUSTRAC has released practical guidance and will continue delivering webinars, training, and tools throughout 2026. We encourage you to engage, to ask questions, and to use these resources. We are here to help.

The expectations are clear. Maintain strong risk management. Plan thoughtfully. Engage senior leadership. Demonstrate real progress.

Ultimately, this is not compliance for compliance’s sake. It is about protecting Australia from criminal harm. It is about ensuring your businesses are not exploited. And it is about the shared responsibility we all carry.

Together, we can lock criminals out, protect our communities, and ensure Australia’s gambling sector remains a leader in integrity and trust.