As Australia moves closer to implementing Tranche 2 of its Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) reforms, SME business owners in the pubs and clubs industry must start thinking proactively about their compliance obligations.

While many venues may not traditionally consider themselves part of the financial services sector, the growing use of high-value transactions, electronic gaming machines (EGMs), and cash-intensive services puts pubs and clubs firmly in the sights of regulators like AUSTRAC.

Why Are Pubs and Clubs in Focus?

The Australian pubs and clubs industry has been identified as a potential conduit for money laundering, particularly when operations include:

• Electronic gaming machines (pokies)
• High-volume cash transactions
• Stored value cards or pre-paid accounts
• Winnings paid out in cash
• Affiliate or third-party payment schemes

The Financial Action Task Force (FATF) and other international watchdogs have long pushed Australia to bring these sectors into the AML/CTF regime. Tranche 2 reforms aim to do just that, creating an urgent need for readiness.

Key Priorities for SME Pub and Club Owners in 2025

1. Know Your Risk Exposure

Start by conducting a formal risk assessment:

• How much of your revenue comes from gaming or cash transactions?
• Do you offer loyalty or stored value cards?
• Are winnings or large transactions processed in ways that could obscure source of funds?

Understanding your unique risk profile is the first step toward compliance.

2. Prepare an AML/CTF Compliance Program

If your venue is captured under Tranche 2, you will likely need a risk-based AML/CTF program, including:

• Customer due diligence procedures
• Transaction monitoring processes
• Internal escalation and reporting guidelines
• Ongoing staff training and documentation

Even if your venue isn’t formally designated a reporting entity, adopting these practices strengthens your governance.

3. Strengthen Your Customer Due Diligence (CDD)

Your staff should be prepared to:

• Verify identities for large transactions or suspicious behaviour
• Monitor and record player activity, especially on high-risk gaming machines
• Escalate suspicious behaviour to compliance officers or management

While most patrons are legitimate, it's critical to detect patterns of potential misuse.

4. Track and Report High-Value Transactions

If Tranche 2 reforms mirror those in other industries, you'll need to:

• Report cash transactions over $10,000 to AUSTRAC
• Submit suspicious matter reports (SMRs) when transactions appear unusual or unjustified
• Maintain auditable records of customer transactions and payouts

This applies particularly to venues that pay out large winnings or accept cash top-ups on gaming accounts.

5. Train Your Staff

Your frontline team plays a key role in spotting and managing risk. Staff training should:

• Cover how to identify red flags, such as structured transactions or reluctant customers
• Include role-based guidance (bar staff, managers, gaming attendants)
• Be ongoing and regularly refreshed, with attendance tracked

Compliance isn’t a “set-and-forget” task—your team is your first line of defence.

6. Digitise and Standardise Record-Keeping

Ditch the paper-based processes where possible. Use digital tools to:

• Log large transactions
• Track loyalty card activity
• Record customer interactions or due diligence efforts

Standardising these processes supports consistency and defensibility in audits or investigations.

7. Engage With Industry Bodies and Regulators

Pubs and clubs don’t have to face these changes alone. Get support by:

• Joining state and national hospitality associations
• Attending AUSTRAC briefings, webinars, or industry forums
• Consulting legal or compliance professionals familiar with AML in gaming and hospitality

The better informed you are, the smoother your transition will be.

✅ The Benefits of Being Proactive

Getting ahead of Tranche 2 compliance isn’t just about avoiding fines—it can:

• Build community trust and patron confidence
• Improve internal governance and reduce fraud risk
• Protect your venue from reputational damage
• Make it easier to work with banks, insurers, and other stakeholders

With greater scrutiny expected in the coming years, early adoption is a strategic move.

🍺 Final Thoughts

As an Australian SME in the pubs and clubs industry, your priorities in 2025 should include:

1. Assessing your risk exposure
2. Creating an AML/CTF compliance program
3. Training your frontline team
4. Monitoring high-value transactions and behaviours
5. Maintaining clear and secure records
6. Staying engaged with industry and regulatory updates

These steps won’t just help you meet legal obligations—they’ll strengthen your business resilience and reputation in a changing regulatory landscape.

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