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One summer day around lunchtime, visitors to the high-roller room at Club Marconi in Bossley Park were interrupted from their play by the arrival of police. The officers were on site to arrest Alex Bittner – a builder and property developer, so he claimed – who was a regular at the club’s Diamond Suite, an invitation-only gaming room with swipe-pass access through a door that looked more like a service entry to the uninitiated.
A week earlier, the Australian Border Force intercepted 163 tablets of cocaine hidden behind the mirrors of ornaments in a package shipped from Peru. Officers removed the drugs, which had an estimated value of $925,000 to $1.4 million, and had the parcel delivered to its designated address, where Bittner collected it. He had been under surveillance ever since.
When police swooped on the Diamond Suite on January 8, 2019, Bittner had 4.14 grams of cocaine in his pocket. A raid on his home yielded $203,350 in cash and several packages of white powder concealed behind a kitchen kickboard. He would plead guilty to attempting to possess a commercial quantity of an unlawfully imported substance, possessing a prohibited drug and dealing in the proceeds of crime, and be sentenced to four years non-parole.
Inside the architect-designed Diamond Suite at Club Marconi.
The incident caused a stir at Club Marconi. Bittner ranked about 30th at the club for his poker machine turnover. Eight of his associates had not been seen since his arrest. The club’s compliance manager called Troy Stolz, the then anti-money laundering and counter-terrorism finance manager at ClubsNSW, who advised him to lodge a suspicious matter report with AUSTRAC.
Stolz would later tell the NSW Crime Commission that although the club knew from its loyalty program that Bittner was putting about $250,000 a year through the pokies, it had never explored his source of wealth as required under anti-money laundering laws. It seemed to Stolz that some clubs had little interest in preventing money laundering until it was impossible to ignore.
“At the end of the day, Club Marconi don’t want pressure to turn away Alex Bittner who’s putting $5000 through the pokies,” Stolz said. “They don’t want him pushed to the pub down the road.”
AUSTRAC has received 3000 suspicious matter reports from pubs and clubs this year, a 300 per cent increase on previous years.
Not all clubs rely on gaming revenue – many do not even have poker machines – but Club Marconi is heavily dependent on it. It set up the Diamond Suite as an alternative to the casino for locals who do not care to brave the M5 motorway. The architecture firm that designed the space features a testimonial from the club’s former boss Grant Imeson on its website. “We had to stand out in the most competitive gaming market in Australia,” Imeson said. “The Diamond Suite gave us a major point of difference.”
Loyalty programs give members points when they swipe their rewards card, which qualify them for privileges such as meal discounts, free drinks and raffle tickets. Top-tier membership at some clubs can require players to turnover more than $150,000 per year.
Wesley Mission chief executive and gambling reform advocate Stu Cameron said loyalty programs were incompatible with responsible gambling and should be illegal.
“Loyalty schemes for purchases of food and drinks are one thing, but to count points based on gambling losses towards membership of the Diamond Tier in a rewards program is perverse,” Cameron said. “All this does is incentivise gambling, to encourage people to gamble more than they planned so they can get a few more points towards some illusory and fleeting reward.”
The exterior of Club Marconi.Credit:Janie Barrett
Stolz, who turned whistleblower after resigning from ClubsNSW in late 2019, believed clubs should also be using data collected by the programs – such as player spend, turnover, wins versus losses and cancelled credits – to spot signs of suspicious play. But monitoring was patchy, particularly at clubs with fewer than 200 machines.
“The average person wouldn’t know [the Diamond Suite] was there,” he said. “These people want their identities under the radar.”
He lodged a complaint about Club Marconi with Liquor and Gaming NSW, which investigated and reported last year that there was no evidence of non-compliance, though the club agreed to improve the signage to its Diamond Suite.
AUSTRAC has received 3000 suspicious matter reports from pubs and clubs this year, a 300 per cent increase on previous years, which the agency has attributed to its national education campaign.
Inside the Diamond Suite at Marconi Club.
The NSW Crime Commission found last month that money laundering through poker machines in the state’s clubs and pubs was “widespread and significant”, and comprised both gambling and washing of dirty cash. Investigators observed that some suspected criminals did not use rewards cards (which might identify them), so they made arrangements for ordinary punters to put money through the machines on their behalf while using their own cards to accrue loyalty points.
NSW Premier Dominic Perrottet has supported the commission’s recommendation to introduce a compulsory cashless gaming card that would track transactions and remove their anonymity, but he faces resistance in cabinet and Labor has not committed either way. Peak industry group ClubsNSW is against a cashless system, arguing it would be costly to implement among other objections.
Gaming Consultants International managing director Neil Spencer, who has provided advice to the Tasmanian government on its cashless gaming system that will go live next year, said the technology to track player activity already existed and clubs were using it in their loyalty programs. The challenge and expense lay in authenticating player identities and developing a system to link the data and reconcile transactions between clubs.
The venues would likely pay a fee to a third-party operator to run the system, in the same way they pay a private entity to run the centralised monitoring system that calculates their gaming tax, Spencer said. “It’s an additional cost on a venue operator that doesn’t exist today, and it’s not a revenue grower, it’s a cost.”
The other expense would be the loss of revenue.
“The crime commission was worried about persons using gaming machines to clean money.” Spencer said. “Their recommendations were meant to introduce barriers to make that less attractive, so I’m sure they expect, and the government expects, that people using gaming machines for illegal purposes will stop doing that and therefore that revenue won’t be received, either by the operator or the government who gets tax from that.”
Club Marconi declined to respond to detailed questions, including whether its employees suspected money laundering was occurring on its premises before the arrest of Bittner or whether it had made any changes since.
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