Casinos in Australia have long operated under the watchful eye of regulators, but the expansion of the Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) regime through Tranche 2 reforms signals a new era of heightened scrutiny and accountability.

For SME operators in the casino sector, especially smaller regional establishments or digital platforms offering gaming services, this presents a crucial opportunity—and obligation—to align operations with best-practice compliance standards.

⚖️ What is Tranche 2 and Why It Matters for Casinos

Tranche 2 aims to expand the scope of AML/CTF obligations in Australia by bringing Designated Non-Financial Businesses and Professions (DNFBPs)—such as lawyers, accountants, and real estate agents—under AUSTRAC’s regulatory umbrella. However, its broader effect is reinforcing AML expectations across all high-risk sectors, including casinos.

Casinos, particularly smaller operators or digital gaming SMEs, are under pressure to:

• Improve transparency in customer transactions
• Prevent money laundering through chips, tokens, accounts, or digital wallets
• Strengthen governance and reporting

If your casino operation includes gaming machines, loyalty programs, or digital payment systems, Tranche 2 should act as a compliance wake-up call.

Your Top Priorities Under Tranche 2 AML/CTF Reforms

1. Upgrade Your AML/CTF Program and Risk Assessment

Your first step is to review and formalise your AML/CTF program in line with Tranche 2 standards:

• Define your business-specific risks (e.g. cash-heavy transactions, offshore patrons, syndicates)
• Establish clear procedures for customer onboarding, monitoring, and escalation
• Document governance structures and assign a compliance officer

Tip: SMEs must ensure the program is tailored to their size and operational complexity—copy-pasting from larger casinos won’t suffice.

2. Enhance Know Your Customer (KYC) and Due Diligence

Casinos are uniquely vulnerable to anonymous and third-party transactions. Your KYC process should include:

• Identity verification of patrons before they participate in gaming activities above set thresholds
• Understanding of source of funds and beneficial ownership for business accounts or syndicates
• Enhanced Due Diligence (EDD) for high-risk customers (e.g. foreign VIPs, politically exposed persons, digital wallet users)

Don’t overlook digital gaming accounts—Tranche 2 will expect you to monitor remote transactions as closely as physical ones.

3. Implement Real-Time Transaction Monitoring

Every spin, bet, or cash-out can be a potential red flag. Key monitoring strategies include:

• Watching for structuring, where players break up transactions to avoid detection
• Identifying large or unusual buy-ins or cash-outs
• Monitoring loyalty point redemptions or chip exchanges for laundering behaviour

Automated monitoring tools—particularly those that can flag behavioural anomalies—are increasingly vital, even for SMEs.

4. Establish a Clear Reporting Framework

Under Tranche 2, AUSTRAC will expect SMEs to submit:

• Suspicious Matter Reports (SMRs) for transactions inconsistent with a customer’s known profile
• Threshold Transaction Reports (TTRs) for cash transactions of $10,000 AUD or more
• Ongoing compliance reports during audits or on request

SMEs must implement clear internal protocols for recognising, escalating, and submitting these reports within mandatory timeframes.

5. Train Your Team – From Pit Bosses to Back Office

Every staff member in your casino should be trained to:

• Spot suspicious activity
• Apply KYC requirements with consistency
• Escalate red flags in a timely manner

Training must be continuous, documented, and scalable. Consider interactive online modules for team members in remote or rotating shifts.

6. Review Third-Party Partnerships and Payments

If you rely on:

• Affiliate marketers or player acquisition firms
• Digital wallet providers
• Third-party payment gateways or payout platforms

…you’ll need to perform Know Your Business (KYB) checks and due diligence on these relationships to ensure they do not introduce AML vulnerabilities.

Additional Considerations for SME Casino Operators

• Digital Casinos: If you offer any form of online or mobile gaming, Tranche 2 will require stronger monitoring of user registration, in-game activity, and payout mechanisms.
• Cryptocurrency Payments: If accepted, crypto must be treated as a high-risk payment channel requiring enhanced scrutiny.
• VIP Programs: You must monitor VIP client behaviour and source of wealth, not just winnings and losses.

Final Thoughts

The casino industry—both online and physical—has already experienced waves of regulatory reform. Tranche 2 is not just an extension of the AML framework; it’s a call to lift the entire compliance culture within the sector.

For Australian SME casino operators, this is the time to:

• Build resilient AML/CTF foundations
• Empower your team with training and tools
• Embrace RegTech that scales with your growth
• Avoid reputational, financial, and legal risk before it’s too late

‍